A new survey has shown that London is the world’s top city for investment in commercial real estate. In the survey, London beat off competition from such global business luminaries as New York and Washington D.C.  London ended the survey with a score that was 31 points higher than the second-placed Washington D.C. due to recent mortgage improvements and offerings, and was a full 40 points ahead of New York, which finished the survey in third place. according to the results of the survey by the Association of Foreign Investors in Real Estate.

The results mark a real turnaround for London, which found itself in second place in the same survey last year-some four points behind Washington and a mere two points ahead of New York. According to investors and analysts, part of the reason lie in the belief that the price of commercial real estate in London has already reached bottom when compared particularly to price in the US which have not. According to the chief executive of the Association of Foreign Investors in Real Estate, James Fetgatter, at the current time, London presents the advantage of a re-priced market to investors, and this re-pricing began much sooner than that seen in other cities. Interestingly, the survey, which takes into account the association’s 200 members who own over $200 billion of real estate worldwide, concluded that the US is still regarded as the most secure real estate environment globally.

This belief, however, has been eroded, with merely 44% of those responding to the survey believing that the US market is currently the most secure, this figure being down from 53% in 2008 and 57% in 2007. It is, in fact, the very first occasion on which the figure has dropped under 50%. The survey’s respondents voted Germany as the globe’s second most secure market.

Fifty-one percent of respondents thought that conditions in the US were most fertile for capital appreciation both from domestic and overseas interests, with the UK coming in second and China third. With regard to the top emerging markets, China, Brazil, Mexico, Turkey and India came out on top.

Two-thirds of respondents stated that they were looking at upping their US investments during 2010, raising equity investments by 62% and debt investments by 83% over levels seen in 2009. Respondents also believed that global equity investments for 2010 would be 46% over 2009 levels, but 20% lower in terms of debt investment.

Recently published research has indicated that average residential property prices in the UK rose by a huge 273% in real terms since 1959, and the largest increase was seen during the last decade. During the 2000s, residential property prices rose by 62% being driven by top mortgage rate offerings and an increase in favourable fixed rate mortgages in addition to even favourable options for those seeking bad credit mortgages, marginally in front of the next largest rise of 61% that was seen during the 1980s, as the figures from the Halifax Building society’s research into the housing market of the past half century. In terms of performance, the worst decade for rising house prices was the 1990s, during which property prices fell 22% in real terms.

The Halifax’s figures have illustrated that there are definite cycles in the property market, and that there are four marked periods of fast house price growth: from 1971-73; 1977-80; 1985-89 and 1998-2007. Each of the four periods was immediately followed by marked real-terms drops in residential property prices. Half a century ago, the price of the average home in the UK cost £2,507, with just one house in seven possessing an outside toilet. A whole half century on, the cost of the average home is £162,085, and two houses in every 1,000 still possess an outside lavatory.

The Halifax’s decade-by-decade figures show a modern Britain more divided than at any other time by the regional differences in house prices. The figures show that Yorkshire and Humberside was the region with the lowest house pries in 1960, and that the same region remains the lowest to this day.

This point is not exclusive to this region alone, however. Every region in the UK has continued to fall further behind London. The principle factor for this is the rise in real earnings, and this has seen a greater increased in the Greater London region than anywhere else in the UK.

The study also illustrated that the type of housing people live in have altered completely, with the de rigeur semi-detached houses of the suburban 1930s having fallen totally out of fashion and favour. The number of bungalows being built has also fallen substantially, with 36% of new build after 1980 being accounted for by detached housing. The figures showed that people are now much more likely to be living alone, with married couples accounting for 7 out of 10 households in 1970, changing to 42% by 2009.

A recent survey by major insurers has found that property owners whose portfolios contain uninhabited properties should seriously look into determining and availing themselves of the appropriate levels of legal expense coverage in case of squatter occupation affecting their vacant properties.

Aviva, one of the UK’s leading companies, there may be around 20,000 squatters living in the UK. And, despite the fact that domestic properties seem to be generally more at risk from squatting, commercial property owners who own empty buildings as well as private-sector landlords may be equally vulnerable to squatting, in turn lowering property value and thus affecting mortgage value as well.

Mike Colmans, Aviva’s underwriting manager, stressed the importance of putting adequate protections in place in order to stop squatters gaining entry to properties and taking ownership of them. “Once squatters are there, it can be extremely difficult to remove them,” Mr Colmans said, going on to point out that, in his experience, he had witnessed squatters taking possession of such commercial properties as seasonal businesses, which often remain dormant for periods of time. He also discussed the problems associated with gaining interim possession orders from courts in order to have the squatters ejected.

Such procedures are often very expensive and time-consuming. Mr Colmans is certain that it is the duty of brokers to bring the attention of property owners to what is becoming an increasing problem and also to discuss possible security measures that can be taken, if they have not been already. Such measures might include sealing letterboxes in order to stop the accumulation of postal deliveries-a sure sign to those outside that a building is uninhabited.

It is also a wise idea to put up perimeter fencing, as well as thinking about such measures as security patrols, the installation of more lighting and improving locks, alarms and CCTV measures. Also, owners should double check that utilities supplies such as gas, water and electricity have been turned off at the mains. Isolation values should be chained and padlocked, where manageable.

It is imperative that property owners undertake such regular checks on their premises, as they are considered mandatory should a claim need to be made. If, in the event of an insurance claim, the insurer examines the security measures taken by the property owner and finds them to be inadequate and that sufficient measures have not been put in place to protection an uninhabited property, they may well refuse to pay out.

He also pointed out that periodic checks on a vacant property are mandatory, for in the event that a claim needs to be issued insurers may not actually payout if they feel that appropriate measures to protect the property have not been implemented in a timely manner and due diligence was not exercised. This is especially important for those looking to use the property for a re-mortgage to finance further investments as well as it will most likely have a major negative impact upon the mortgage values able to be granted.

According to recent figures it appears that more and more homeowners and mortgage holders are renting out spare rooms in their homes than ever before. Analysts have speculated that the change may be due to the fact that mortgage holders are making the switch in order to aid the paying off of debts incurred over the Christmas season.

A number of groups dedicated to the requirements of house and flats sharers have stated that, since the beginning of 2010, they have seen almost unprecedented numbers of homeowners seeking to rent out spare rooms in their properties. According to the groups the number of homeowners advertising for lodgers rose by 29% when compared to the mirror two-week period in January 2008. Also, the number of new live-in landlord advertisements listed since the beginning of the year had already outstripped the total number placed in the whole of last year. A survey conducted showed that 65% of homeowners surveyed classed themselves as ‘over-stretched’, with Christmas-incurred costs pushing them to look at ways to improve their finances. This has even led to a number of increased buy-to-let mortgages with purchases aimed solely at future subletting to recover costs.

Analysts have suggested that the Christmas period seems to have acted as a ‘tipping point’ for many people’s personal financial circumstances, and that the beginning of the new year has signalled a new period of motivation for people to take action on their finances. They point to the fact that just the first two weeks alone of 2010 have seen unprecedented levels of advertisements of live-in landlords.

Many companies have worked out that the average room rental prices per week stands at £87, with the result that mortgage holders choosing to rent out a room could pay back the average Christmas debt within five weeks. Taking a longer view, however, and not just taking Christmas-related debts into account but non-mortgage UK household debt as well, which stands at just over an average of £9,000, simply using generated rental income to repay this debt would take around two years. Any additional mortgage or re-mortgage debt will of course add to this amount, yet the initial return can help offset overwhelming debt many people face yearly.

The credit crunch has seen one million householders take in lodgers during 2009 – a record figure – and industry experts have predicted that this figure will only grow further during 2010 as people look for a simple, tax-efficient method to pull in extra income as the financial crisis of the past year and a half continues to impact on people’s lives and finances.

The market for prime properties in central London enjoyed its third consecutive month of growth, illustrating the continuing recovery of this particular market, and analysts are confident that prospects remain decent for 2010, according to the latest figures and mortgage trends.

The final three months of 2009 witnessed price increases of 4.6%, resulting in a figure of 8.8% for the total annual growth in this particular sector, according to the research from Savills estate agents. The current figures therefore puts the market for prime central London properties only 13% adrift of the peak levels it witnessed during 2007.

Yolande Barnes, the head of residential research at Savills enthused about the figures,stating that, at least as far as the London markets were concerned, the prospects for 2010 look decent. She did however caution that house price growth was highly likely to weaken, even in prime property markets such as central  London. She commented that this eventuality was hastened further by the pre-budget report from the Chancellor of the Exchequer that bonuses for banking officials in the City would be curbed. She stated that such a measure would most likely limit the amount of bonus money available for liquidity and therefore would limit the amount of money able to flow into central London’s prime property market.

Ms Barnes added that, despite these points, the prospective prime property market in Central London should stay a decent prospect – certainly from an investment perspective, citing interest rates paid on deposit accounts as compared to average annual gross rental incomes, which stand at 4.6% on flats and 3.9% on houses. With rents beginning to grow once more – and at an annual rate of around 5% – this simply adds to the allure and encourage many to seek out buy-to-let mortgages that may not have done so otherwise.

Analysts at Savills are convinced that mid-long-term investment growth prospects are decent, but qualify this by stating that stock selection is a vital factor in this, as the recent report illustrates that stock in different locations as well as different types of properties are likely to show price discrepancies.

To qualify the figures according to such variations, an investor buying flats in South Kensington, Knightsbridge and Chelsea in 1999 would have enjoyed a 40% growth of the value of their property portfolio, whereas if they had invested their money buying flats in either Notting Hill or Holland Park their initial capital would have seen appreciation of 115% and 128% respectively.

Figures indicate that among the highest growth areas during the past decade were those favoured by people employed in the financial services sector, including Kensington and Notting Hill. These areas are also popular as they are serviced by the Central line which links them directly into the very heart of the City. Most people who are opting for a first time purchase tend to not settle in these areas as well, leading to a more well-established neighborhood of experienced home owners.

Recent figures have indicated that currently property in the UK is more affordable than at any other time in the last five years, with UK property buyers now needing to use a far lower portion of their income in order to pay the cost of their mortgage interest. The figures are particularly interesting with regard to people currently moving home and have had previously bad credit or are simply looking to become a first time buyer with limited funds as they are now seeing an historically low debt burden according to the Council of Mortgage Lenders. The figures show that they now typically needed just 10.6% of their gross income in November 2009 in order to take care of their mortgage interest payments. This figures was down from October’s figure of 11.1%.

This ranks as the lowest debt burden for home movers since the Council for Mortgage Lenders began recording such data back in 1974-except for a brief blip which saw a low of 10.2% in mid-1996. November saw lending volumes experience a seasonal dip, seeing 53,000 house purchase loans-giving a drop of 4% on October. Despite this, however, the number was still a huge 66% rise on the figures for the previous November.

Contrary to this, however, the 31,000 loans for re-mortgage fell 6% from October, illustrating a Y-O-Y drop of 39%. This demonstrates the continued two-speed market with regards to house buying and re-mortgaging. With regards to total new lending figures, loans for house buying made up 60% of the figure in November, which is the highest portion seen since 2001.

However, from January 2009, continued low interest rate levels as well as the continuation of extremely stringent lending conditions have resulted in the demand for re-mortgaging falling. Indeed, since January 2009, the percentage figure showing loans for re-mortgage dropped from 53% to 31% during November. The director general of the CML, Michael Coogan, welcomed the affordability of mortgage interest payments for movers and first-time buyers, however, he cautioned that the necessity for substantial deposits in order to secure a mortgage would see the market continue to remain fairly restrained for the foreseeable future.

Also, up-to-date figures published by the Department of Communities and Local Government illustrated that house prices in the UK were 0.6% higher in November 2009 than  they were in November  2008-having risen 1.7% since October, with the average cost of a property in the UK standing at 200,454, with annual price rises being witnessed across the UK-with the notable exception of Northern Ireland, in whose case prices had fallen by 11.6% Y-O-Y.

A recent report has highlighted the fact that the value of farmland properties  in England rose by 2% during the final quarter of 2009- marking the first rise in price in this sector since the summer of 2008. During last year’s final quarter, prices in England rose to an average per-acre figure of £7,200, according to the report published by Smiths Gore.

Despite the buoyancy in the new figures, farm property values remain roughly 10% lower than as of last year, with the farmland market still being extremely subdued. In fact, the report also indicated that less than half of all land listed for sale was actually marketed during 2009’s final quarter period. Head of Research at Smiths Gore, Jason Beedell, said that the report highlighted the general picture across the country, with the amount of land actually up for sale being extremely limited ,alongside what Mr Bedell described as ‘pent-up demand from farmers, non-farmers and investment buyers’.

Part of the reason for increasing values is down to the fact that smaller farms are being marketed. Giles Wordsworth, Head of Farm Agency,  explained that this was principally because smaller farms have higher ‘per acre’ values at attracted better mortgage rates than many other comparable valued land. This is largely due to the fact that the buildings occupying the land push up the overall value and price of the land.  Mr Wordsworth pointed out that, as a result, it was essential to market farm properties appropriately in order to get maximum value for them.

Figures also showed that transactions during last year were lower than in 2008, seeing, on average, a drop in the marketing and transactions of equipped farms, with figures standing roughly 100 acres per-sale below the 2008 figures.

Actual bare land values fell a little across England by 2% recording an average of £4,800 per acre, indicating a return to the kind of figures witnessed at the beginning of the year. Analysts say that values have remained roughly unchanged across England, and postulate that the slight drop may be down to the smaller number of sales and scarcity of land for sale in the quarter covered by the latest figures.

As a general trend, Smiths Gore predict that the improvement in the  farmland investment market will continue in 2010, citing strong demand and a lack of suitable stock. Both domestic and overseas investors may also be attracted a a result of possible rises in value in the near future, as well as the discernible advantages offered by tax law – in particular for those looking at purchasing at completing a first-time purchase.

A recent survey has indicate that buy-to-let property investors in the UK are now much more confident with regards to the general market conditions they will face in 2010. Factors such as more students looking to rent rooms, the general uncertainty about what will happen to interest rates and continued repossessions mean that business looks good for landlords. Despite this, however, the mortgage sector continues to make things difficult for landlords, with buy-to-let mortgages being hard to come by, with the one’s available requiring either large deposits or expensive arrangement fees. Also, the fact that housing benefits can now be paid directly to tenants also makes things trickier for landlords.

Confidence remains high among landlords, however, as the figures from the January Rental Confident Index, published by the online rental agents, Upad, report that 64% of al landlords questioned were more confident regarding the market and conditions. This figure has risen 6% on the previous survey conducted in December 2009.

James Davis, founder and chief executive of Upad believes that the survey’s results are a very positive indicator for the private rental sector, and he is confident that the sector will enjoy positive growth in 2010. It appears that professional landlords have begun to take a much longer-term view, cashing in on the deals available in the current economic conditions. As a result, they are now managing their property portfolios like businesses, which Mr Davis commented will aid in ‘minimising unnecessary void periods.’

The recently published Young Index also reflected a growing confidence among landlords, showing that the majority believe that market conditions are now better than in the final quarter of last year. Of all respondents questioned, 99% were planning to keep their real estate asset for a minimum of another year. Parallel to this, the Index also showed that the percentage of UK investors planning to hold onto their property assets for at least 10 years rose by 5% during the fourth quarter of last year to a new figure of 49%-rising from 44% in the third quarter. Of all landlords questioned, 22% planned to hold onto their assets for 20 years or longer.

Figures in the index also showed that around 60% of the UK’s buy-to-let investors were considering  adding to their portfolios during 2010 and were looking at buying new properties in London, including commercial property given the current favourable prices that can be found on a few non-key pieces. Conversely, some 43% were investigating buying properties outside the capital. These figures show a substantial increase from those see this time last year, when they were recorded at 33% and 8% respectively.

Property analysts have stated that property prices are likely to outperform inflation by around 40% during the next decade, although they also believe that such price growth will be at a lower rate than the market has witnessed during the past decade as demand increases and top mortgage rates are offered by competitive lending establishments. The property consultancy, Savills Research, recently forecast that stock shortages will serve to sustain demand, however the limited access to mortgage finance will squeeze price rises. Savills predicts a rate of 40% inflation adjusted growth over the next decade in the mainstream property market, bringing the figure into line with the long-term average.  Recent figures have seen an inflation adjusted growth of 71% during the past decade, a drop of 14% during the 1990s, and growth of 43% and 4(% during the 1980s and the 1970s respectively.

Lucien Cook, director of Savills Research, said that he expected to see a much more restrained pattern of lending during the coming decade. He believe that this will clearly set the new decade apart from the pre-credit crunch era of the 2000-2010 years which witnessed very high inflation adjusted growth when compared to historic norms.

Mr Cook also believes that the legacy of the past decade will most likely be an irrevocable split in the residential market between the haves and have-nots of the equity world. The market would already seem to be bearing this forecast out, as a regionalised property market already appears to be emerging with regard to price and desirability. Savills also anticipates a sustainable growth in the house prices of the equity rich hotspots from 2011 and onwards.

He believes that, in marked contrast, areas affected by lower equity levels and higher levels of unemployment will lag some way behind those equity rich areas. The prospect of a slow economic recovery is also a factor.

Savills also predicted a variance in the geographical growth pattern seen during the last decade, possibly even witnessing a reversal for areas having outstripped the average over the past decade. Interestingly, geographical areas exhibiting the highest levels of growth precluded most of Central and South Eastern England, principally due to the fact that these areas saw the strongest surge during the early periods of the growth phase of 1997-2007 from both domestic and overseas investors. The extreme South West, West Wales, Northern England and Norfolk, meanwhile, were the strongest areas for the growth of house prices for both private home owners and those who have purchased to let.

A season fall saw the overall UK property market recovery slow somewhat, but, despite this, the general outlook is still upbeat driven by positive market conditions and some of the best mortgage rates available to consumers lately, according to a report published Jan 10th.

Surveyors in the UK are still in confident mood  as new demand continues to outstrip supply, despite the fact that residential property prices rose more slowly in the UK During December 2009. In fact, more chartered surveyors have confirmed that they are receiving a larger number of new instructions for the seventh month running-this according to the latest figures from a report published by the Royal Institution of Chartered Surveyors.

Despite the fact of the fresh demand for properties continuing to keep ahead of new supply, the gap has narrowed, and December saw precious little change on overall transaction levels in December 2009, according to the RICS. The Society attributes the loss in momentum with regard to prices and the cooling of interest among new buyers-at least in some part-to the fact that the housing market largely closed for business over the Christmas period.

Analysts at the society went on to predict that the New Year was likely to see renewed interest and activity in the housing market, underpinned by renewed interest and activity among those marketing their properties for sale. However, the bad news for buyers is that the lack of sales properties continues to support house prices.

Putting the microscope on region trends, London and the Southeast still show the most widespread price increases, with prices continuing to drop markedly in Northern Ireland. Wales, along the the West and East Midlands saw more modest price falls.

December 2009 reportedly saw very little change in terms of transaction levels, with the number of sales per surveying firm staying put around 19 for the fourth month running. Meanwhile, the carefully monitored sales-to-stock ratio, a firm measure of market slack and a principal pointer to future prices was slightly curtailed.

Analysts believe that London will see continued positive activity, with buyers continuing to outnumber available properties, pushing prices up further still and potentially attracting further overseas investment as well. This trend is expected to continue for the foreseeable future. There is considerably less confidence, however, in the areas where prices continue to fall, particularly in Wales, where buyers are still uncertain about entering the property market,  despite the fact that property sales improved during 2009. It appears that the housing market in such sensitive areas remains sensitively balanced, with buyers continuing to be extremely cautious. analysts do not expect the situation to change in the short-mid-term.