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Overseas Investors to Keep London Prime Market Afloat

[ Posted August 28th, 2010 ]

While tensions rise in the property lettings market many people are expecting the prime property market for both residential and commercial properties throughout London to remain steady in the coming years in spite of many reports that general property values are expected to fall in 2012. The reason for this lies not in domestic purchases but the fact that overseas investors are seen as a primary benefiting factor for prime real estate throughout the nation’s capital.

While it is true that even the prime property market can suffer its own ups and downs throughout each year pursuant of whatever supply and demand issues may be at play the fact remains that London is seen by many of the world’s elite as "the" place for seeking out higher education, developing international connections and even establishing many business centres no matter what their personal background may be. This has caused the prime property market in many areas throughout London to remain highly valued by many people, working to keep costs associated with the highest standards of living from dropping or even facing the same fears that many other sectors face on a regular basis.

International interest in prime real estate is holding true both for residential and commercial developments in key property areas as well, meaning that developers and property holders in these areas are resting better assured now than they have been in past years where even developments such as Canary Wharf were facing financial difficulties due to financial strife affecting companies in those areas. One area that is expected to still face difficulties are those properties whose value is rated at over £10 million, however, as these have shown regular discounts in the range of 10% to 15% in order to encourage additional purchasing during stagnant market periods.

Thurrock Development Escapes Axe

[ Posted August 27th, 2010 ]

Latest reports indicate that the Thurrock Thames Gateway Development Corporation, originally established in 2003 by the Department of Communities and Local Government with the goal of regenerating the Thurrock area after its progressive recession, is set to not join the Homes and Communities Agency in April of 2011 as originally anticipated. This is particularly good news for many relying upon the Thurrock development’s efforts to keep their work up to speed and out of any long-lasting negative impacts of the ongoing unstable recovery following the recession.

The commercial development zone of the Thurrock Thames Gateway was originally facing a large number of issues in the early part of the turn of the century due to waning interest by many groups in establishing ongoing commercial investments in the area – the same troubles that faced Canary Wharf in that time as well. In order to stem off any potential negative impacts this may have and encourage additional investment from both domestic and overseas interests the Development Corporation for the area was established.

Over the past seven years the Development Corporation has done substantial work in helping to spur on the development of the Thurrock Thames Gateway and the previous efforts have helped stem off any move to dissolve the corporation for the time being. The Communities and Local Government spokespeople have said, however, that both the Thurrock Thames Gateway Development Corporation and its sister group, the London Thames Gateway Development Corporation, are being put under review for the time being and an official announcement over whether or not both development corporations will remain independent bodies in the coming years or if they will be dissolved as was originally planned.

Investors Cautioned to Reign In Enthusiasm

[ Posted August 22nd, 2010 ]

Many investors are cautioned against investing in some areas throughout the country, with places such as London being considered relatively stable regardless of the current economic conditions and the North being particularly susceptible to current economic trends. This caution comes on the heels of many investors looking towards other areas throughout the UK for real estate purchases away from London in the hopes of securing a good deal for themselves and get more return for their money, leveraging the continued low mortgage rates offered by many lending organizations as fully as possible for the time being.

Unfortunately for many people the long-term instability of many regions means that their investments may, in the end, cost much more than they possibly could have made otherwise due to the fact they are looking more at short-term returns rather than long-term potential. With this in mind most investors are cautioned to enter into any real estate market now, be it buy-to-let, standard property or even commercial property, with a ten-year perspective in mind in terms of long-term profit and sustainability rather than hoping for a two-year quick turn-around of whatever investment they may make.

The primary reason for this caution being expressed in many areas as a large number of property markets are currently being flooded with a number of sellers looking to take advantage of their property’s current high market value while they still can, quickly outpacing buyers in many areas. This is a reversal of earlier trends where a housing shortage in most areas helped to drive up prices, thus causing the boom to establish itself even in many locations that would not see any substantial growth in property value otherwise. Bearing this in mind investors should do their homework thoroughly before investing in any of these areas that has experienced an unexpected boom as the economy may very well turn around and work against them in the near future if things do not continue down an ideal path in the months to come.

Mum and Dad Calling In Debts

[ Posted August 21st, 2010 ]

The Bank of Mum and Dad, one of the most supporting lending groups for many prospective home owners on the market today due to the high costs associated with many new first-time buyers entering into the market, has recently been reported to be calling in greater debt relief from their "customers". In fact, according to recent reports roughly 10% of all residents throughout the UK have reportedly lent or outright given their parents an average of £8,250 last year – a significant increase from 2008 figures of a more affordable and flexible £6,500.

This increase in costs is seen by many as being expected in many cases, coming as the result of an entire generation needing to turn to their parents to cover various costs associated with modern living outside of the housing market as well such as education costs, general living expenses when faced with hard times and even unexpected unemployment coming their way (such as what faced many individuals in recent years due to the widespread economic recession across the globe). This has left many parents in a financial deficit that they must now call in funds from their children to help repay.

The majority of funds received by parents are typically not going to most other expenses in their lives, however, according to recent surveys on financial spending trends. In fact the majority of funds tend to be shifted away from additional expenditures and more towards paying off existing debt, as fewer and fewer households later on in life wish to deal with the additional burden a re-mortgage may have to offer even with the continued low mortgage rates set out by banks and instead simply prefer to eliminate their existing debts through other means.

As the housing market continues to require significantly higher costs associated with entering into it than typically seen in previous years these figures are expected to continue to rise, and without some sort of correction many economists are concerned about what the future may hold in terms of financial support for the current generation when their time of need comes.

London Prime Target for Overseas Investment

[ Posted August 20th, 2010 ]

With the Euro gaining strength throughout the year and showing a longer-term comeback off of 2008 lows London has once again become a prime target for many overseas investors, especially those that can successfully obtain local mortgages from lending institutions throughout the UK that can allow them to take full advantage of the continued low mortgage rates available to UK buyers. This has led to many properties becoming highly valued in many key areas, with London’s premium home market (those homes with a value of over £5 million) coming up to a total value of roughly £1.6 billion as of the end of June this year.

This has regularly been a trend for some time in London as the capital city has long been an area of prime interest for non-domestic purchases, much to the chagrin of local first-time buyers wishing to get into the property market without needing to leave the city to do so. This has been true for a number of areas around the world in terms of showing interest in UK property, with Europeans in particular showing top interest in times where the Euro is especially strong.

Whenever the Euro shows signs of cooling off, however, it is not the European market that is seen as the prime overseas consumer within the UK but other countries that traditionally have had their currency pegged to the US Dollar that are primary active members in the local economy – namely Russia, India and China. These three all show regular strong purchasing power and presence within the local real estate market for London and other parts of the UK irrespective of the Euro’s current strength due to their stronger connection to the North American markets and their economic standings.

Seaside Property Seeing New Increase in Demand

[ Posted August 19th, 2010 ]

With many markets throughout the country experiencing something of a cooling pattern as of late a large number of seaside properties have shown a large increase in interest from many people around the country. In particular Hornsea, Bridlington and Withernsea in Yorkshire as well as Fraserburgh and Peterhead in Scotland have all shown substantial growth patterns in terms of real estate interest, with many southern regions as well showing some increases over previous months.

Many experts have attributed the recent shift towards seaside living as a move for many individuals to see a lifestyle change in their own life rather than an actual investment or first-time purchase, with many individuals and couples deciding to sell their more inland homes to shift their living environment entirely to the seaside setting. This has been a particularly popular choice as of late as many individuals are looking to take advantage of the higher cost of their homes in more urban settings to fund the purchase of a traditionally higher priced seaside area.

Another major factor driving many people to make the move now rather than later lies in the fact that the continued low mortgage rates offered by many lending establishments thanks to the Bank of England’s continued record low interest rate means that they can successfully lock in a lower fixed-rate mortgage now than they may ever be able to realize in the future, effectively making this the prime time for all real estate owners to make their ideal dream home become a reality and finally move to the place they have always wanted to.

For those looking to move to the coastal regions it should be noted, however, that even though the cost of homes in those areas is traditionally much higher than in other areas they are still affected by the same supply and demand factors that affect other regions and coastal homes have seen neither significant increases nor decreases in value as of late in the market.

House Prices Balancing Over Many Areas

[ Posted August 18th, 2010 ]

Reports from the RICS have been somewhat grim in many areas, with an ongoing downward trend in terms of real property prices in many locations, though this has proven to not be the case in all regions. The East Midlands, for instance, has caught many real estate agents at a particular low with trends tending to level out more and striking a balance off of previous market highs. Throughout London, the North West and South West, however, prices have continued to stay on the rise with owners experiencing continued high points as the summer burns on.

This news has boded well for many investors looking to continue activity in many areas, though at the same time a large number of property holders have maintained strong aversion to pushing forward with further investments in many areas in the East where prices have been seeing regular declines in recent months. These trends are seen to be driven particularly strongly by a number of domestic and international interests alike, with places such as London seeing a strong overseas property interest in addition to strong support in the commercial sector.

The property decline is not seen as all bad news for everyone, though. In fact the lowing of house prices in many areas has opened up many purchasing potential for buyers that may have been shut out of previous opportunities due to high prices in the past, with continued low mortgage rates meaning that buyers can finally take full advantage of options on the market they may not have had the chance to realize otherwise. While this still may not be the case in many Western areas the recent decline in prices in the East coupled with the growing number of properties on the market outpacing the number of buyers in those areas is boding well for many prospective purchasers, meaning that property crash or not it may end up being good news overall for a large number of people.

New Regulations Could Benefit Village Developments

[ Posted August 17th, 2010 ]

New regulations being pushed for in the Community Right to Build Proposals could lead to greater flexibility and, in turn, greater development potential for many communities throughout the UK. Designed to grant greater autonomy to many developing areas throughout the country, these proposals could result in community development being able to continue even in the absence of a specific planning application being filed for review by a central committee.

For many developers around the country their hopes are that this proposal, should it go through, will grant significantly greater development potential for many areas and allow for a higher level of autonomy in many respects. This, combined with the continued low interest rates offered on many home loans – including both fixed-rate and tracker mortgages – will work to stimulate many local area developments and provide support for both existing home owners and first-time buyers alike.

This move is seen as potentially allowing villages and other housing areas to grow and evolve more along the lines of previous development trends, allowing for housing areas to evolve on par with those seen in previous years in order to allow local developments to grow and shift according to local demand.

Many opponents do feel that this may lead to excess development in some areas that may damage the overall image of some villages, yet at the same time concerns over long-term residential sustainability are strong and outweighing the costs these may pose at this time. This is particularly true in recent days where economists are expressing great concern over actual growth patterns and showing some concern over a potential recession in terms of real estate occurring in the coming months as the shift moves more away from home purchasing and towards rental living conditions instead.

Student Accommodation Costs Affecting Markets

[ Posted August 14th, 2010 ]

Recent reports have indicated that the average cost of student accommodation in most school areas is on the rise, with the national average rising to £65.30 – a full 4.3% over previous figures. This, in turn, affects the buy-to-let market in many areas as more and more students seek alternative housing options in many cities as well as potentially encourage additional investment on their own part in the way of first-time purchases as more and more people look to leverage the current favourable mortgage rates as much as possible.

This is particularly an issue when looking at longer-term trends in regards to student accommodation, with an overall 25% increase in costs being seen beginning in 2004. Additionally work has progressively becoming more and more difficult to find in order to help support many students in some areas, as the economic hardships being felt particularly strong beginning in 2008 adding heavy challenges to many young learners seeking part-time employment.

Some experts feel that the current situation may lead to an increase in re-mortgages being taken out by family members to support their children’s accommodation and possible future home purchase, though at this time the current trend of most people throughout the country is to shy away from such actions and instead opt to eliminate their current debt levels rather than incur additional costs that will simply take longer for them to pay off. Given the current status of the economic recovery this is seen as a strong positive trend as of now, though with the additional strain being created thus increasing the potential for further debt many lenders and economists alike are becoming concerned over the long-term trends going into 2011.

Housing market weakness indicated by new figures

[ Posted August 11th, 2010 ]

According to new figures from the Bank of England, mortgage approvals dropped further than had been anticipated during June whilst overall lending stalled. Some believe that the figures suggest a further softening of the housing market over the months to come.

The BoE also said that mortgage approvals, which are a general barometre of house prices generally for roughly the next half-year, stood at 47,643 in June, which represents a fall from May’s downwardly revised figure of 49,461. The figure is also below the forecast figure of 49,000. June also saw net mortgage lending growth standing at 665 million compared to May’s downwardly revised figure of £838 million, once again below the forecast figure which was expected to be a rise of £1 billion.

The new figures appear to lend credence to recent evidence suggesting that the housing market is hitting the buffers after a run of strong rises in house prices seen last year. The figures also come in the wake of Nationwide, one of the UK’s leading mortgage lenders, recording a 0.5% fall in house prices for July.

Nationwide laid the blame for July’s fall in the housing market on widespread fears regarding probable government spending cuts – as well as tax increases – that are likely to impact massively on household budgets in the UK.

Alan Clarke, an economist at BNP Paribas, is not overly optimistic about the short-mid-term prospects.

"With fiscal tightening and thousands of public sector workers likely to lose their jobs, I don’t see this picture changing any time soon," Mr Clarke stated.

The Governor of the Bank of England, Mervyn King, cited continuing weak flows of credit to all individuals ranging from first-time buyers to even bad-credit mortgage seekers as a big threat to the economic recovery in Britain. Mr King also said that, despite seeing stronger than anticipated growth during the second quarter of this year, the upturn was far from secure. Interest rate and gilt futures, however, were boosted by the figures, as investors speculated that the BoE would be likely to leave mortgage interest rates low until there is definitive evidence that the recovery is more secure.

The housing market saw a recovery in 2009 after the rapid fall seen in 2008, although the revival was largely due to a lack of market supply rather than improved availability of mortgages or underlying demand.

So far, 2010 has also seen a falling trend for house prices, with more owners deciding to sell coupled with falling demand from buyers-mainly due to their resistance to take on more debt as well as the scarcity of availability of bank loans. Mr King also acknowledged that this year’s improvement in credit conditions has now ceased, with the lending squeeze providing real difficulties for smaller firms as well as providing a real challenge for those formulating policy.EFBQHKWXBD59

 
 
 
 
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