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England’s Most Expensive Real Estate Locations

[ Posted December 30th, 2009 ]

If you’re looking to pinch a few pennies when purchasing a home in London then definitely steer clear of Kensington and Chelsea. These two locations are the home of the UK’s most expensive real estate, with over half of the country’s most expensive residential streets located in the borough. To gain some perspective on this, the average price of a property in Wycombe Square is 5.4 million Pounds. While London is not unique with this trend as five of the nine regions of both England and Wales all contain streets with average home prices of over 1 million Pounds London is still the cream of the crop in real estate prices.

This isn’t the greatest of news for those looking at needing a high mortgage for their home purchase, however it is still a key point to consider for many people when comparing houses for purchase in their area. Each city district and each city has their own higher- and lower-range housing locations and balancing you needs for each can mean the difference between finding a suitable home and being out in the cold.

Thankfully for those looking to find a comfortable middle-ground between these super-high end areas and the less-than-desirable districts that may be out there many financial institutions offer various plans to help get and keep you going when needed, particularly if you are self-employed or have substantial savings built up over time. Both self-certified loans as well as offset loans have seen a revamp in today’s real estate market and for many people these have allowed for much more comfortable purchases than may have been possible otherwise.

Just remember to do your homework before hand in researching into where these higher-end residences may be located in your area as this could help save you a lot of time if you’re not looking at laying a few million pounds down at a time to purchase a new home. Be especially mindful of this in rural areas that may be deceiving – with today’s growing trend to seek out rural real estate in key areas many unassuming lots may actually pull a hefty price tag, do research thoroughly both online and offline to be sure of what you’re getting yourself into.

Chinese Bidding Wars Driving Up Land Costs

[ Posted December 29th, 2009 ]

With new legislation set to take effect as of January 1 next year many major players in the real estate industry in China are locked in major bidding wars currently in heated competition with each other in order to snatch up as much land as they can as quickly as possibly in order to develop a strong foundation for development. This has led to the most recent price battle drawing to an end at a grand total of $545 million for a roughly 114,000 square meter plot of land in Shanghai, a price roughly 217% more than the initial asking price.

The irony of the matter is that the new legislation that is the cause of instigating these price wars that are continuing up until midnight December 31 was originally designed to prevent just such a thing as this from occurring. The law would require all new purchases after January 1 utilizing bank mortgages to have at least 50% of the purchase price paid back within a year, meaning in the case above that if the deal had closed in January instead of now a grand total of over $272 million would need to be paid back within one year’s time whereas the old law allows for the repayment of the costs to be spread out over a much longer period. This would make any land such as this that will most likely be treated as a “buy to let” plot for the time being in 2010 be feasibly unreasonable to purchase at that price, regardless of intent.

While it is anticipated that the new law will have some effect upon the Chinese housing market eventually the fact still remains that the price wars that are going on before it takes effect are causing prices to sky-rocket. By allowing the bidding wars to take place the value of the land is becoming artificially inflated and real estate development companies are forced to charge extremely high amounts to turn a profit. In the most recent case, for example, the developer would need to charge over $7,500 per square meter alone in order to make some sort of profitable gain out of the venture, effectively pushing up the value of neighbouring land even further.

For individuals not living in China this trend could be seen as a sign of what may be to come in some domestic urban areas where supply can not reach demand and as a result prices are soaring, especially in regards to some commercial property in key locations.

European Commercial Property Hurting In 2009

[ Posted December 28th, 2009 ]






According to recent reports the European commercial property market has sustained some major losses in 2009, with direct investment dropping to a mere 70 million Euros. This is a reduction of nearly 40% over 2008 numbers, showing a strong lack of investor confidence in the European housing market at this time. Thankfully analysis predict that investments should see a 20% increase in 2010 as the economy begins to recover a bit more, however it is still too early to tell for sure.

For those looking to invest in European commercial property, however, this could be an excellent opportunity as banks are more likely to give favourable rates on mortgages to any investors in order to stimulate the economic growth of the area.

In order to achieve the intended 20% increase in the next year and maintain a positive growth rate be sure to keep a close eye on loan rates and interest over time, as the large drop over this past year is putting increased pressure on financial establishments to offer favourable deals in order to increase investor confidence and improve turnover.

Currently the UK is standing the strongest in the European commercial property market, accounting for nearly 38%, or 25 billion Euros, worth of direct investment in commercial area, though the current condition is still being described as one of if not the lowest point in what is being considered the worst economic downturn to ever face the modern business world.

The biggest difficulty now is also finding quality product to invest in, as prime locations are being savagely vied for as key commercial locations are being held on to. Due to the decline in development over the past year a number of anticipated prime locations have also gone down in value, making those that are established even more of a target for investors, both domestic and overseas.

If you're considering investing in commercial property or have some commercial real estate of your own consider these facts and weigh them heavily before committing to any deal in the coming months.

Interest Rates Maintained at 0.5%

[ Posted December 27th, 2009 ]

The Bank of England has announced that interest rates will remain solid at 0.5% while the Monetary Policy Committee has announced at the same time to keep its easing programme limit at 175 billion pounds. This has come as a shock to many analysts as they point out the recent decline in production output as a stark reminder that the UK’s economic recovery may not be guaranteed and an even lower interest rate and higher quantitative easing programme limit of 200 million may be necessary.

The reason for the unrest primarily lies in the fact that many real estate sectors throughout the UK are still facing difficult times in the wake of the economic recession, causing many land owners to be forced into turning over their land due to unfavourable conditions over the past year. This has even led to many businesses being forced to close their doors due to poor performance, even now as the economy is beginning to recover from its record low in the past.

For others this is an opportune investment time as many properties are becoming available on the market at rates that not have been available in the past, especially for mortgages for first-time buyers that are looking at getting involved in the real estate market on their own.

Still, the concerns over the rate offered by the Committee and the easing programme are sound, as the economic turn-around is not guaranteed for certain yet at this point and many people – both new purchasers and existing real estate owners alike – may continue to face strong hardships in the coming months at the currently offered plan if the economy does not maintain a positive trend.

Depending on the option which may favour you most, be on the lookout for various new offerings coming into the real estate market in first quarter 2010, particularly in regards to any mortgages for those who may have developed bad credit due to the sustained economic downturn faced throughout 2009.

Cairo potential investment hot-spot in 2010

[ Posted December 26th, 2009 ]

Set as a major portal to both Africa and the Middle East, Cairo is looking to establish itself further by capitalising upon recent improvements in its local economy to bolster its housing market and potentially see large increases in property value in 2010. This could mean a potential cost-effective investment for international housing buyers looking to diversify their investment portfolio.

The primary drive behind Cairo’s success and anticipated continued development in the coming year is not speculative as many other markets but is entirely driven by the actual needs of the local area for both residency and tourism. This is causing strong increases in value for residential as well as office, hotel and commercial sectors across the city as the over-focus and saturation of luxury housing is dwindling in lieu of comprehensive development across urban sectors.

Having a strong focus in locally on a cash-based system as many developing areas do Cairo is now branching more into a combination of modern and developing society, allowing for those who are willing to take on a mortgage to have strong potential purchasing power in the area. This is designed to attract additional investors who are looking at taking out overseas mortgages to invest in the area for development and capitalise on the growth that is occurring rapidly.

While this may not be the best option for first-time buyers who are not ready to accept some risk along with their investments this is still a keen opportunity for others who are looking to diversify their earnings potential by looking elsewhere for both short- and long-term sustainable returns on investment that they may not find by looking purely at a domestic market. At the same time if the world economy does not pick up in the coming months this will most likely be a longer-term investment that needs to be weighed out before committing to it completely, as increasing property value will be more dependent upon the city’s overall development and an increase in foreign interest that might not pick up until a few years in the future.

Spanish Banks Needing Big Housing Cuts in 2010

[ Posted December 25th, 2009 ]

According to many reports banks in Spain, now the largest holders of real estate property due to numerous foreclosures, will need to offer discounts of up to 50% on property values in order to turn some of their property over and back to the general public. In order to curb the current trend this is expected to happen in early to mid next year, which could mean a great opportunity for many people.

For those of you who haven’t kept up on the European property market over the past few months many lots and residencies have become available as of late due to foreclosures by the government and seized by banks across the continent due to economic hardships that have hit Europe particularly hard compared to other areas of the world. The difficulties caused by the economic downturn may have affected different areas in different ways, however now as the primary business sectors are beginning to recover the real estate market is just getting hit with the full-force of the effects due to the delayed reaction real estate sectors face in these sorts of situations.

While this has caused many people to lose their homes after long battles with banking establishments to keep their residency at the same time it is an excellent opportunity for many others to gain valuable property of their own that may not have been available otherwise as the banks are are forced to make a move in order to prevent the current return in some economic strength that has been building recently from stagnating and causing the recession to drag on even longer in 2010 due to their excessive holding of valuable real estate that is netting them no positive value or benefiting their local area.

The anticipated discounts are not unique to Spain, nor would they be uncalled for given the recent trends. Though they most likely won’t occur in the coming month anticipate first or second quarter 2010 to show some attractive deals coming out of Spain that you should keep your eyes peeled for if you’re interested in any continental real estate, and given the desire to push the properties out back to investors you can most likely find excellent deals on fixed mortgages for the home purchases or even possible attractive remortgage deals for your current home should you already be a homeowner that would allow you to purchase a foreclosed home easily.

Dubai – A home away from home?

[ Posted December 24th, 2009 ]

Recent reports indicate that Dubai is currently offering discounts on property purchases in lieu or attracting new investments to the area. This could potentially mean a strong option for those who are looking at lucrative real estate investments overseas in order to improve their portfolio and give themselves an alternative to the standard home purchase locally.

In order to recognise the greatest gains individuals should have already been an investor in Dubai sometime in the past, however this is not a prerequisite as costs on many housing developments are being reduced across the board for all buyers. The goal of this movement is to reduce the current prices of real estate in some areas back to the prices they were in 2005-2006, effectively cutting the cost per square metre by up to 50% in some cases.

For those looking to take on a mortgage for investments this is also an excellent opportunity as the reduced costs are making for exceptionally attractive deals for external investment and especially those who have had previous investment dealings in Dubai as those are the ones who are most likely to receive the best dealers from current developers.

Be wary when looking toward refinancing in the area, however, if you are a current home owner as the comparable value of real estate will be dropping significantly which will have a negative impact upon your real estate’s value, so consider waiting until later months if you can afford it. On the other hand given the potential value of the property at stake it may be exceptionally easy to obtain an overseas mortgage for investment purposes, so bear this in mind as well as the property being offered right now could easily double in price once again in the coming years as it returns to normal value.

UK Property Price on the Rise

[ Posted December 23rd, 2009 ]

Many experts believe that in 2010 the cost of UK homes will increase by as much as one to two percent as transactions rise and housing developers will have a hard time meeting the demand of the public. Experts believe that the average home cost will increase to a total of 70,000 pounds from the current 55,000 to 60,000, a major increase for both home owners and prospective renters or buyers alike.

This is especially good news for those looking to refinance their home with a new mortgage in 2010 after the record low real estate prices that were affecting UK markets in 2009. The UK was not alone in having a less-than-shining 2009, though, as overall many real estate sectors saw drops of up to 40% over 2008.

Increasing house prices here, however, are a sign that the economic recession is on a rebound and that many homes are returning in value to what their expected actual fair market price should be. This has been a long-anticipated time for many home owners as banks are also responding by offering a number of new loan options for new or existing home owners to help them remortgage their home and clear up a bit of their debt they’ve incurred over the past year with a bad credit mortgage.

Still, this turnaround is not necessarily guaranteed at this point, and early 2010 should show some more solid signs of whether or not this increase will actually be realised or not as the currently struggling real estate market could do extensive damage to the currently recovering economic situation in general if left unchecked.

If the gain were to be successful in early to mid 2010 that would mean a much more solid foundation for a strong economic rebound to occur next year for the UK and potentially even Europe in general as the UK is one of the major contributing countries to the direct investment in some real estate sectors in all of Europe.

Inheritance Tax-The Basics

[ Posted December 20th, 2009 ]

We are now altering our habits in terms of giving property over, with people taking advantage of policies such as reverse mortgages to combat the rising care costs of looking both ourselves and other family members in the latter years.

However for many of us, the giving of property is something that stands out in our minds as one of the key things we can pass on to our loved ones after our passing in terms of financial contributions.
But there are some important things to think about when you are considering the transition of your property to others.
The main thing that many individuals fail to cover is the issue of inheritance tax.
Currently the inheritance tax threshold for all a deceased assets lies at £325,000, including both the property and any other equity.
Inheritance tax can be quite a shock for the unprepared as it is charged at 40% on amounts over the threshold, meaning if you have a house of £425,000 then you must pay an immediate bill, or instalments to the value of £40,000.
As it is unlikely that most households will be able to raise the required cash then the house must then be sold to release the houses in tenants in common’ and therefore this will mean deductions are first taken from other assets and the remainder, if any is then still applicable. Tax on properties sent into trust are subject to a discounted rate of 20%

Another option is to sign over your house as a one-time gift to a next of kin, however this must be completed 7 years before your death, the downsides of this obviously are that you don’t live in a house that you own, requiring that there are matters beyond control that must be accounted for, does you next of kin live in a financially stable situation for example? If not then this may not be the best option.

Whatever the options you pursue then it may be wise to start planning early to make sure your loved ones are not left with a financial burden.

Investment in USA Properties Increases

[ Posted December 19th, 2009 ]

Housing in the USA is growing increasingly popular particularly amongst those of an English speaking background as there is no language barrier to get around, especially in the UK, where housing prices, although affected by the market crashes of the last year or so have remained relatively strong compared to some areas of the rest of the world, driven by extensive domestic demand. Other countries following suit are western
European countries such as France and Spain.

Following the latest decreases in the exchange rate between the US dollar and the Euro and Pound, as well as the housing market crashes in America, the US is looking like an increasingly favourable location to invest in property, which could yield a nice profit when exchange rates rebabalance and the US housing market stabilises.

There are other reasons too for buying a house in the US, apart from the purely financial ones. While investing in some developing countries are a risk and home owners also must make certain compromises on overall living conveniences and amenities, the US has none of this, in fact, in many places the standard of services and convenience would actually be a step up from the buyers place of origin.

However it is important to consider certain details while considering buying a home in the USA, if one is looking to invest in property as a purely financial decision. The first would be to choose a place of existing and continually developing commercial and tourist development. This will guarantee rental income on the property and also make sure the price continues to appreciate rather than fall. Key locations for this would be in the well known areas such as Las Vegas, Florida, or California.

Other key considerations for those not solely investing , but wishing to eventually move to America would be to look at the climate, educational and transportation links to their place of origin (should they wish to return!) as unlike many other countries in Europe, where laws are over a whole country, big variations occur state to state.

 
 
 
 
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