Thursday, August 25, 2005

Sell in Spain - buy in the UK

Scotsman.com Property - More set to buy second homes in UK: "

Thu 25 Aug 2005 MICHAEL BLACKLEY

THE second homes market in the UK is set to experience growth at unprecedented levels over the next decade as Britons choose to invest at home rather than abroad, according to a new report. It predicts the market in the UK will be worth £53 billion by 2015, with the number of people owning a second home in the UK soaring from 328,000 now to 405,000 - significantly above the 249,000 estimated to be owned by Brits overseas.

The research, by Direct Line and the Centre for Future Studies, found warmer summers will make the west coast of Scotland a more attractive area for a holiday home. Glasgow, meanwhile, could become a second home hotspot for those who want to buy property in the city to live in during the working week before retreating to their more rural main home at weekends and holidays. It also highlighted the Scottish Borders as another second home hotspot for investors, as the Borders rail link will make the area much more commuter-friendly and the average price of property is likely to increase as a result.

Andrew Lowe, head of home insurance at Direct Line, said: 'A strong economy, warming climate and a regenerated urban landscape are the key factors set to make Britain more attractive than ever as a second home location.' Part of the reason for the predicted growth in the second home market is that more people fall into typical profile of the second home owner - affluent 45-64 year olds.

Mark Hordern, of the Glasgow Solicitors Property Centre, said the west coast of Scotland has a lot to offer and will continue to be popular with the UK's second home owners."

Worth investigating. With a warmer climate in the UK popular second home locations are bound to be in higher demand. Find them and get in before eveyone's talking about it.

Chris

Link

Landlords hit by oversupply of buy to let flats

Scotsman.com Property - Property News - Troubled waters for landlords: "

Thu 25 Aug 2005

GREG GORDON

It seems like only yesterday that every man and his dog wanted to be a buy-to-let investor. Buying off-plan on the waterfront was a passport to riches and staring off into the horizon all we could see were calm waters offering exponential capital growth and a tidy sum each year from rental profits. As the reality of both over-supply of investor-friendly flats and over-optimistic predictions takes hold, however, the tranquil waters of buy-to-let have taken on a distinctly choppy cast.

Paul Mugmaioni, a director of rental sector investors Quality Street dates the sea change in the newbuild rental market to the interest-rate hike around a year ago. That rate raise, allied to a general cooling in the housing market, precipitated a mass investor exodus from buy-to-let and a climate where the speculators consolidated their positions while looking elsewhere for investment opportunities.
The rental expert estimates that oversupply in the rental sector and the effect of large-scale development on supply, particularly at Glasgow Harbour, has seen landlords' annual rental yields slashed and in some cases, the value of some waterside apartments have dropped by 30 per cent. "

Buying off-plan city centre apartments was an easy way to make money a few years ago - now it's a quick way to lose it despite the hyped-up claims of those still promoting this kind of investment. Beware!

Chris

Link

Wednesday, August 24, 2005

It's getting tougher for student landlords

The housing market in Nottingham is changing as students choose swish new apartments over traditional homes.:

DAVID BYERS reports:

"Everyone knows, or thinks they know, what student homes are like. The traditional stereotype of a student house or flat has it at best cheap and cheerful, at worst damp and depressing.

But the students did not seem to mind. They had chosen their digs, after all, and when things got tough they could always run back to their parents in the suburbs for comfort. Yet now students seem to have had enough of living like students - and landlords are counting the cost.

A flurry of smart purpose-built accommodation complexes, such as Raleigh Park and St Peter's Court, are luring thousands of students with cut-price rent deals with broadband and bills included.

This is one of the reasons being given for a significant increase in the number of empty homes in Nottingham."

It also means times are tough for Angela Barbaro, owner of Notts-based AB Property Management, who has worked in the student and professional housing business for 19 years. The agency has 14 properties for students in its portfolio - yet ten of these, in Lenton, Forest Fields and Clifton, are sitting empty, and have done for months.

"Up until last year it was hard, but this year it has been unbelievably difficult," she said. "Huge buildings are being put up which have a big knock-on effect for landlords, who simply can't compete. At St Peter's Court, 700 students have moved in there, by the business school. Raleigh Park is another big development, with several hundred places. And a new building in Gregory Boulevard takes 400 students.

"All of this purpose-built accommodation has broadband and bills all inclusive for about £70 a week. A private landlord will charge £65 without bills. It really isn't viable to charge anything less.

"I don't like renting for students because the market's stagnant - I don't take any more student properties."

So should landlords be selling up or lowering their rents to attract students? Neither, according to Ms Barbaro.

"Working with landlords is quite difficult because they never want to put their hand in their pockets," she said. "But the key to landlords renting their properties is to do them up to look smart and add additional facilities: decent showers, bathrooms, broadband internet - to offer students a decent deal. Some landlords do and some don't. And the ones that don't are the ones whose properties are being left empty. I'd say 40% of landlords I know have done up their properties, gutted them, put in broadband and created a nice house. But 60% have not."

It's tough, and it costs money, but as a landlord you just have to keep an eye on the marketplace and do what it takes to stay competitive.

Chris

Link

The Property Investor Show - don't miss it

The Property Investor Show, ExCel Centre, London, 23-25 September 2005: "The Property Investor Show is the ideal place for obtaining reliable and up to date market information. Access to good information is the key to successful investing and with over 100+ seminars offering you the help and advice you need to make the right choices.
INVESTORS
Already well established amongst property investors for both UK and overseas markets, The Property Investor Show has earned a place in every serious investor's diary. An information, networking and advice forum - it's no wonder the show has become the largest property investment exhibition in the UK, and such a firm favourite amongst investment professionals.
1ST TIME INVESTORS
You don't have to be a professional to come to the show. If you're a 1st time investor - you will find The Property Investor Show 2005 an invaluable resource for planning your next move and helping you to make the most of the property opportunities open to you. You can talk to the top experts in the industry, using these sources to make informed decisions about your next property acquisition.
OVERSEAS PROPERTY
Roughly half of this year's show will be dedicated to overseas property. This gives you the opportunity to compare established overseas markets such as Spain, France & the USA with new emerging markets like Cyprus, Croatia, Hungary and Bulgaria. Or the chance to look further a field still, at diverse places like Australia, Brazil, China, Thailand or the Caribbean. All these countries will be represented by agents and developers along with specialists who will help you with all you need for buying, selling, and even moving overseas.
WITH EXPERT LED SEMINARS TO ANSWER EVERY QUESTION
As always at The Property Investor Show, the seminar programme is impressive!

A great day out for the property investor and very informative too. The seminars are very popular so book in advance if you can.

Chris

Link

Tuesday, August 23, 2005

An opportunity for canny investors?

NAEA: "Figures released by the National Association of Estate Agents (NAEA) today show that 61% of its members feel that the introduction of Home Information Packs (HIPs) in 2007 will create an unrealistic housing market.

An influx of homes is expected to flood the market in the months before the introduction of HIPs, as sellers attempt to avoid the increased cost of selling a property. The cost of the HIP, paid for by the homeowner, is expected to be between £600 and £1,000. It could be even more for larger than average properties. This will be a further addition to the rising expenses that homeowners currently face. "

Keep an eye on this one. This could be an opportunity to negotiate an even better deal in the current buyers market.

Chris

Link

Monday, August 22, 2005

Experienced investors are not sheep

Money - Times Online:

"Continued uncertainty over the future direction of house prices is deterring the opportunist investors who saw buy-to-let as a way to make a quick buck. However, many experienced landlords consider the current climate a good time to expand their portfolios.

These investors are taking advantage of a weak housing market. Potential buyers have been holding off because they fear big price falls, and this has pushed up rental demand. Investors are also benefiting from a knock-on effect: many vendors have been struggling to sell because buyers are reluctant to enter the market. This allows investors to negotiate discounts.

Nigel Terrington, chief executive of Paragon Group, which owns two specialist buy-to-let lenders, Paragon Mortgages and Mortgage Trust, said: Many investors have an incredible network with the local estate agents and they know who is selling, which properties have been on the books for a while and which vendors need a quick sale. They are then able to buy below market value."

There's no time like a slack market to look for a bargain - go for it!

Chris

Link

Improving schools give big boost to house prices

Hometrack has analysed property price changes in the catchment areas of the ten most improved state schools in England since 2001, revealing that top grades at your local comprehensive can double the rate of increase of the value of your property if it’s within the catchment area.

In total the average property prices in the ten catchment areas has soared by 76% since 2001, in stark contrast property prices have only increased by 39% in the immediate surrounding areas. However in some areas, property prices have soared by a staggering rate in excess of 120%, such as the area in close proximity to Waverley School in Small Heath, Birmingham.

Hometrack 19 July 2005

Just shows that being near an improving school makes a really big difference to the capital growth you get. This really should be a factor the buy to let investor takes account of.

Chris

Starting out in buy to let

If you are interested in starting a property investment portfolio but don't have a wad of cash handy, start small by renting out a room in your own home in order to save for the deposit for your first investment. There is a 'rent a room' tax allowance for individuals which for the year 2005-2006 is £4250.

(Although, to be frank, I never heard of anyone actually paying tax on income they got from letting a room in their own home!)

Chris Bell

Sunday, August 21, 2005

Should you be remortgaging now?

Over three quarters of property investors and homebuyers are now considering remortgaging this year, according to the Property Investor Show.

The reduction of the base rate from 4.75% to 4.5% at the beginning of this month was the first change in the rate since August 2004 and the first downward move since July 2003.

Lee Grandin, managing director of Landlord Mortgages who will be exhibiting at the Property Investor Show in September, comments: “There has been a visible surge in remortgaging over the last few years. Recently we have seen many buy-to-let investors opting for lifetime trackers as they are at their lowest rates above the base rate. One product we offer is only 0.39% over the Bank of England base rate for the lifetime of the mortgage. The other popular option is three-year fixed rate mortgages which suit investors as they offer some stability but don’t tie them in for too long if rates do come down.”

I normally prefer fixed rate mortgages but these lifetime trackers seem worth investigating. When did you last check that you're getting the best deal on your mortgage package?

Chris Bell

Link

Buy to let pushes up university property prices

House prices in university towns have soared by 88 per cent in five years and more than doubled in some cases. Issuing the figures yesterday, Halifax, the biggest mortgage lender, said that parents who invested in property for their children while at university would have had a good return on their money.

It said the average cost of a home in the towns and cities of the 20 best-performing universities had slightly outstripped the national average, with prices across the country as a whole rising by 83 per cent since 2000.

Manchester had the biggest rise, the cost of property soaring by 114 per cent to an average £136,603. Bath was next, with a 113 per cent rise to £253,208. In York the cost increased by 109 per cent and prices at least doubled in Birmingham, Sheffield, Nottingham and Durham.
Prices in 14 of the leading 20 university towns and cities exceeded the national average, with only Oxford, Cambridge, London, Warwick, Guildford and Reading lagging.

Telegraph 21 August 2005

Investing in student property has been lucrative for landlords and it's still worth investigating. Do your research. Good properties within walking distance of universities will always have a ready market in student tenants.

Chris Bell

Link

Better Get Your Fixed Rate Mortgage Now

Homeowners and buyers thinking about opting for a fixed rate mortgage should get in quickly; lenders are starting to withdraw cheap deals from the market.

According to mortgage brokers Savills Private Finance, in the past 10 days Portman Building Society has raised its five-year fix from 4.45 to 4.59 per cent, Northern Rock placed its fixed-rate range on withdrawal notice (meaning it can pull them at short notice) and Abbey withdrew its fixed rate mortgage deals and replaced them at rates of 0.1-0.15 per cent higher. Alliance & Leicester also put its two-year fix on withdrawal notice, while Newcastle withdrew its two-year 4.22 per cent fixed deal.

Sunday August 21, 2005
The Observer

Seems that with oil prices rising and inflation starting to rear its ugly head the Bank of England won't be cutting interest rates any time soon as was previously expected. Now could be the time for buy to let investors to make sure they fix their interest rates.

Chris Bell