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Inward Migration and the Growth of the British Property Market

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• What Next for Property?

  2008-10-04T02:19:00.000-07:00
  Listened to an interesting podcast recently by "renegade economist" Fred Harrison on the need to tax land not income as the basis for public finance and long term market stability.
  
  His ideas, if implemented, would challenge the need for a blog such as this one (hardly a great loss in the overall scheme of things.) This was the man who in April 2005 predicted a property price down turn in the UK at the end of 2007 and into 2008.
  
  Worth a listen as lots of people in developed countries are now starting to ask fundamental, structural questions about the nature of the economies they are a part of - questions which go way beyond the short term issue of whether the value of my house will rise or fall next month.
  
  
  
  
  
  
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  atlanticwriter

• Return of the Cheap Mortgage?

  2008-09-09T12:59:00.000-07:00
  Was interested to notice today that Yorkshire Building Society is offering a mortgage at 5.29% fixed till October 2010.
  
  Not quite the heady days of 4.5%, and only available on 75% loan to value; but, a little piece of evidence that all is not doom and gloom in the UK housing sector.
  
  
  
  
  
  
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  atlanticwriter

• In a Word - Libya

  2008-09-03T16:07:00.000-07:00
  I'm too busy to go into the reasons now, but, for the record, remember where you heard it.
  
  Libya is the next Dubai.
  
  Whether you would want to invest in such an autocratic and intolerant country is, of course, another matter.
  
  
  
  
  
  
  
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  atlanticwriter

• UK House Prices May Rise 30% Say CEBR

  2008-08-07T14:08:00.000-07:00
  House prices in the UK will stabilise in the first half of 2009 and then rise by up to 30% over the following three years.
  
  That's the prediction of the Centre for Economics and Business Research who cite underlying demand for residential property coupled with a lack of new homes as the key factors driving this turnaround.
  
  A similar prediction was made on this blog on May 9th (see comments).
  
  If correct, the CEBR forecast will see the average price of a house in Britain reach an all-time high of £226, 000.
  
  Which means that buying about now before prices start to rise could be a smart move for the private investor. John Templeton would probably have thought so.
  
  
  
  
  
  
  
  
  
  
  
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  atlanticwriter

• Invrestment Tip - the American South West

  2008-07-24T11:34:00.000-07:00
  
  
  
  Desert land in the south west of the United States has historically been the graveyard for uninformed investors.
  
  Private buyers have sometimes been swayed by the opportunity of owning a large piece of New Mexico or Texas for less than the price of a season ticket for their favorite football team and have not always done their due diligence.
  
  The two main problems with American desert land have been road access and water. Owning ten acres of scrub with no road access and no water means that housing cannot be built on the land, leaving it expensive to develop and therefore undesirable as as a medium term investment. Overseas buyers, in particular, have not always understood the size of the states in question and have found it difficult to imagine how a plot of land could fail to have road frontage.
  
  The pressure for renewable energy sources, however, is causing an increasing number of investors to look again at America's south-west deserts, where abundant sun is causing an increase in what one observer has called "prospecting for solar land."
  
  Combined wind and solar farms are attracted to the region by the climate, the availability of cheap land and the region's proximity to energy-hungry areas such as California and the growing cities of Texas and Arizona.
  
  Although the needs of a solar farm are different from that of a residential division, would-be investors should still be aware of the need for such plots of land to have access to electricity and water, even if they are off the beaten track in other respects.
  
  
  
  
  
  
  
  
  
  

  
  

  
  
  
  
  
  
  
  
  
  
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  atlanticwriter

• John Templeton on Investment

  2008-07-23T00:16:00.000-07:00
  
  
  The death this week of global investor and philanthropist John Templeton provides an opportunity to quote one of his maxims and apply it to the world of property investment.
  
  Although he was not talking about real estate as such, there remains wisdom in his perspective when applied to the issue of when to buy and when to sell property:
  
  

  If you want to have a better performance than the crowd, you must do things differently from the crowd.... I have put these philosophies into a simple statement: help people. When people are desperately trying to sell, help them and buy. When people are enthusiastically trying to buy, help them and sell.

  
  
  
  
  
  
  
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  atlanticwriter

• Is the UK House Market Stabilising?

  2008-07-02T15:04:00.000-07:00

  
  

  The latest Nationwide House Price Index shows that average house prices in the UK have dropped by 6.3% in the 12 months to June - the largest annual drop in 16 years.
  

  You would, presumably therefore, have to be a rare breed of optimist to see the current situation as offering anything positive for homeowners and private investors. Not so, according to Chris Brown, President of the National Association of Estate Agents who claims the market "appears to be stabilising".

  Well, he would say that, wouldn't he. Especially as the first part of this year has seen one or two estate agent firms going bust - a development we haven't seen for some time in the UK. It is obviously in the NAEA's interest to see confidence restored and prices rising again.

  Mr Brown may have a point, however, when we bear in mind the following facts:

  • house prices today remain 4% higher than 2 years ago
  • the rate that prices fell in June was 0.9% - less than half the figure for May. The rate of decline appears to be slowing.
  • most analysts expect a cut in interest rates within the next few months, a further stimulus to the property sector
  My own prediction - which I made originally on May 9th - is that the fall in average house prices will gently end towards the second part of the year and that by early 09 prices will be steadily rising again.
  
  
  

  
  

  
  
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  atlanticwriter

• Mapping the Credit Crunch

  2008-05-17T01:42:00.000-07:00
  The BBC have just launched an interesting map that shows how British residents believe the credit crunch is currently affecting them.
  
  The map, is created by BBC web site users answering a simple question about their perceptions of the credit crunch and then entering the first part of their UK postcode.
  
  The results are colour coded and updated every 30 minutes, showing not only the overall picture but also variation of perceptions based on geography.
  
  Perhaps not surprisingly, concerns about mortgages are the top concern in the UK according to the map, with the impact of food prices being a close second.
  
  
  
  
  
  
  
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  atlanticwriter

• My Brush With Inside Track

  2008-05-10T14:09:00.001-07:00
  
  I'm glad I trusted my gut instincts when I attended a free presentation in 2004 by Inside Track, the property investment company that has gone into administration.
  
  As part of its marketing strategy, the company ran free taster sessions around the country at which they invited people to sign up for the "full" three-day version of their property education seminar - at a cost of £2, 495.
  
  As someone interested in property investment, I went along with an open mind to learn what I could. Having sat through a few holiday club/timeshare presentations in my time, I felt reasonably prepared to avoid saying a word, thus hopefully avoiding a one-on-one sales pitch. I came away from the two-hour event - attended by about 40 people - with five lasting memories:
  • buying off plan can be a valid way of investing in property - as long as the investor is diligent in his or her research on the specific details of the purchase in question
  • the loud American presenter was as off-putting as he was unconvincing
  • the person who welcomed participants to the event was a muscular gentleman with a strong jaw and a blond pony tail. Described by the loud American as a "former policeman" his presence created in me a definite feeling of unease
  • The loud American's central doctrine, repeated numerous times as an incentive to get us to sign up for the full seminar, was true: money flows from unsophisticated to sophisticated people. I was close to asking during the Q & A session what would be revealed about our level of sophistication if we did pay £2, 495 to Inside Track that afternoon. The presence of the pony-tailed one caused me to bite my lip instead.
  • I took away from the event some information I didn't previously know and some tracks (no pun intended) to run down in my on-going journey of educating myself about property investment. It's a journey I'm still on.
    
  You can read about the experiences of some who did pay the money to Inside Track here.
  
  
  

  
  
  
  
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  atlanticwriter

• Leeds Buy to Let - a Lesson in Greed?

  2008-05-10T13:26:00.000-07:00
  As the Times reports today, Leeds city centre is awash with new apartments that no-one wants to buy.
  
  Low lights of this mini buy-to-let bubble include:
  • 1000 city centre flats currently lie vacant
  • About 80% of the city's new apartments were bought as buy to let investments, usually off-plan
  • Flats in the City Island development are currently selling for £50, 000 less than their original purchase prices
  • Some developments remain entirely empty as investors have forfeited their exchange deposits - of up to £20, 000 - rather than be forced to complete on apartments now worth much less than they were originally bought for
  While some are keen to cite Leeds as evidence that buying off-plan is too risky to be worth it, the reality is that the actual lessons to be learned from the Leeds experience are slightly more subtle. They include:
  1. Making sure that any "discount" offered in an off plan property is a genuine one. This means not just taking at face value the figures set out in the glossy brochure but doing the detailed research to find out what similar properties in the same area are actually selling for at the time you are considering buying off plan.
  2. Looking at the detail of the specific apartment and block you are considering. The town may be on the up as an investment area, but if your particular development is next to a rubbish tip, you are unlikely to share in the prosperity. Simply looking at a detailed street map is a good place to start this research. A phone call to the city planning department is another important move. Ask awkward questions and refuse bland answers.
     
  3. Beware of companies that provide "education" seminars and paying membership and properties for members to buy and in-house financial advisors. Any convenience in such a system will be more than outweighed by the lack of objectivity involved in such a neat package. It's good for private investors to have mortgage companies turn them down on the grounds that the investment is too risky. It might be for their good!
  4. Have a contingency plan. Off-plan investments can be sold straight on at completion for an instant profit - when the market is growing. Investors also need a scenario for what they will do if the market turns down at the time they complete. If the original discount was genuine, this should not be a problem. They can either sell for a reduced profit or hold on to the property until prices pick up again.
  A problem in Leeds was that thousands of investors bought off plan (in 2004 or thereabouts) at dubious discounts without a B plan if prices plateaued. The result is graphically portrayed in the Times article. Diligent research, objectivity and a cool head mean that not all investments have to end up the same way.
  
  
  
  
  
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  atlanticwriter

• Ten Ways to Get Great Tenants

  2008-04-19T00:11:00.000-07:00

  If you go the route of buying a property and putting tenants in it, how can you be sure that they will not wreck the place? What are the best ways of choosing good tenants?
  

  It’s an important question, especially when you first start out investing in property. For this reason it’s important to step back before acting and ask some more fundamental questions:
  

  What is the purpose of this buy to let property? Is it to increase your monthly income now? Or, do you see this property as a long term investment that you are planning on selling when you need a lump sum in retirement? Or, is it a combination of these aims?

  One key principle when involved in buy to let is to not think of this house as your future home. If you are thinking this way, you will tend to be overly anxious about it while tenants are living there and imposing their habits on the house of your dreams. Instead, think of the house for what it is - an investment. This simple principle should guide your thinking about tenants and the maintenance of the house.
  

  Equally important is to make sure you are a landlord that people want to rent from. It works both ways in the rental sector and if you are straight forward and honest in your dealings, you increase the chance of your tenants acting the same way.
  

  Put in this context, here are ten ways of maximizing your chances of obtaining good tenants.

  1. References

  Obtain references before signing a tenancy agreement. You want at least one reference from a previous landlord. In the case of first time renters, ask for a general character reference from an employer or education professional.

  2. Be Choosy

  A common mistake for new landlords is to rent out their property to the first people who come along. This, of course, is not the way you would recruit for a job, so why treat your house in this casual way?

  When you advertise the property, don’t accept the first people that respond. Instead, arrange a day to meet them all individually, show them round the property (back to back appointments are an efficient way of doing this) and take a day or two to consider your options.

  3. First Impressions

  It goes without saying that meeting the proposed tenants first is important. You will form an impression of them at that stage. What is it? Listen to your intuition.

  4. Students?

  The mention of “students” can cause some homeowners to break out into a cold sweat as they imagine their lovely house being thrashed by hordes of drunken yobs 7 nights a week.

  The simple fact is that students do tend, on average, to use houses more heavily – partly because they are in them for longer each day than the average office worker.

  At the same time, you can generally stuff more students into a house and thus generate more rent. Furthermore, you do need to revisit the first question in this article: who is this house for? It’s not your future dream home, is it? You really can’t afford to think that way about property investment. You are a property investor so that, at some point, you can have your own dream home. But none of the ones you are renting out should be that home. You’ll become a nervous wreck if you try and muddle these two areas of your life. Remember that any damage caused to the property can be repaired. That’s why you have deposits.

  Think carefully about students. They will be less careful with your house than some other tenants. If you are going to rent to students, buy a property that is suitable for that market – e.g. not a luxury penthouse apartment with HD-TV and, please, no cream carpets.

  5. The Ideal Profile

  Having said that students can bring in a lot more rental income than other tenants, it’s worth balancing this against the fact that your “ideal tenants” in many ways are a married couple of working professionals without children.

  They will be out of the house for at least 8 hours a day 5 days a week. They have some understanding of the value of things (presumably aspiring to own their own home at some stage) and they have enough responsibility to hold down a full-time job and all that goes with it.

  6. Deposits

  In a previous post I emphasised the need to act professionally as a landlord. One area this applies to is the collecting and returning of deposits.

  The deposit should be the equivalent of one month’s rent and is an insurance against excessive damage to the property.

  Some property gurus will suggest that you treat the deposit as another income stream – in other words that you assume it will never be returned to the tenants. I reject this view: it’s unethical in itself and, incidentally, it will reduce your reputation as a landlord, thus making it more difficult to recruit good quality tenants in the future.

  Handled properly, however, the deposit is these to pay for the door that gets kicked in, the wine that is spilled on the carpet and the wall paper that is ripped off by a visiting toddler. It’s there to protect you.

  7. Inventory

  If the property is furnished or semi-furnished, make sure that the tenancy agreement includes an inventory of every item in the property. This should include all removable items as well as fixtures, fittings and kitchen goods. It’s no good quibbling at the end of the tenancy about exactly how many eggcups there were in the third drawer two years ago. Write it down and agree it with the tenants before signing anything.

  8. Drugs

  Your tenancy agreement should have a clause about the use of illegal drugs in the property. It will be next to the clause about “immoral earnings”!

  It’s really simple. If you have evidence that drugs have been used in the property, evict the tenants immediately for breach of contract. That’s why you have a contract.

  Turning a blind eye to the problem can result in several milder consequences:

  • Excessive damage to the property
  • Invalidation of your insurance policy (yes, you do need one as a landlord)
  • Hassle with neighbours, the council and other statutory authorities

  More seriously, a tenant who is using hard drugs will, without question, wreck your home, avoid paying rent and shorten your life through anxiety. Do you really want to be clearing up used needles at the end of the tenancy?

  Thankfully, such horror stories are extremely rare. None the less, do the 7 previous steps properly and be inflexible about drug use.

  It’s no good asking the tenant to stop using drugs in your property - they will agree to this to your face but will not do it. Seek legal help if necessary. The hassle involved in doing this is as nothing compared with the hassle that you will face if you bury your head in the sand. Unpaid rent, court orders, bailiffs, ASBOs, poor media publicity, and a thrashed property are all some of the possible consequences of not drawing a firm line with such behavior. By the way, drug abuse is not confined to certain economic sections of the population, as recent high profile cases illustrate.

  9. Wear and Tear

  Much of the anxiety of renting out a property can be avoided by being realistic about the amount of wear and tear that lodgers will create. For this reason, you are strongly advised to not rent out a property that you have an emotional attachment to. You need to think more professionally than that about your property business. The house is there to bring you an income.

  Accept fair wear and tear. Windows do get dirty, kettles stop working and toilets do get blocked sometimes. Furniture does get scratched. You should expect that a house which has five young adult students in it will receive a lot of wear to the carpets, showers, etc. This does not mean they are being irresponsible. It just means they are in the house a lot.

  Accepting fair wear and tear is a contractual obligation for landlords. Excessive wear becomes the tenants’ responsibility: they must either replace, repair or pay you for such damage. The security deposit is the ultimate source of these costs if tenants are not being reasonable about fulfilling their responsibilities.

  Right expectations in this area will save you a lot of grief.

  10. Respond

  Respond to positive initiatives - for instance if the tenants ask whether they can paint their rooms, go and buy them the paint and brushes. Have you ever had to pay a professional team of decorators?!

  Similarly, if there is a problem, put it right straight away. An overflowing pipe can cause damage if left. It’s your job to get it fixed. If the tenants cause a problem that is their responsibility, respond to it professionally and promptly.

  Of course, no course of action can guarantee 100% that you will not experience difficulties with a rental property. But by following the above steps, you can substantially reduce the risk of serious problems.

  The advice simply put is: choose the right tenants in the beginning, don’t become emotionally involved in the house and manage the business professionally.

  
  
  
  
  
  
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  atlanticwriter

• Qualities of Successful Landlords

  2008-04-17T12:28:00.000-07:00
  The image of the landlord is not always a positive one. Images of Dickensian misers charging huge rents for rat-infested rooms with leaking roofs have left their mark on the public psyche.
  
  Unfortunately, some landlords seem determined to fulfill the stereotype and give everyone else a bad name.
  
  If you want to avoid that approach to property ownership, you could do a lot worse than starting at the beginning - with the tenancy agreement.

  Do it by the book. Produce a professional tenancy agreement and get it signed. There are lots of areas in which you can cut corners safely and legally as a landlord. Make sure your tenancy agreement isn’t one of them. You can download free pro forma tenancy agreements here that you can use as the legal basis for your rental arrangements.

  Knowing your responsibilities as a landlord is another important area. There is enough unhappiness in the world without you or I adding to it by making the lives of our tenants a misery though poor provision of service or bad communication. If you treat your tenants the way you would like to be treated, you’ll develop a good reputation and attract good tenants in the future. For free and extensive advice on what areas remain your responsibility as a landlord, click here.

  
  

  
  
  
  
  
  
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  atlanticwriter

• Bulgaria Investment Property - Reasons for Confidence?

  2008-04-13T12:58:00.000-07:00
  
  
  Following a previous post on the existence of high level corruption within the Bulgarian government, news has emerged this week that the country's Interior Minister Rumen Petkov has resigned from the government amid allegations of corruption.
  
  Mr Petkov's resignation follows the arrest last week of two high ranking police officers on corruption charges and continued pressure from the EU to root out links between government departments and organised criminal gangs.
  
  Time will tell whether the minister's resignation will result in an increased basis for investor confidence allowing secure property invesement to take place within Bulgaria.
  
  
  
  
  
  
  
  
  
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  atlanticwriter

• Before Investing in Dubai, Read This

  2008-04-03T10:46:00.001-07:00
  Dubai, famed for its real estate and luxury hotels, has sought to promote itself as the world's leading real estate investment location.
  
  Properties in Dubai are now being bought by investment companies and individuals and benefit from low entry prices, high yields, generous mortgage offers and year round rental opportunities.
  
  
  Dig a little deeper, however, and you will find in the heart of the UAE, an upsurge in labour strikes and riots in the construction industry as the thousands of migrant workers who are building this investors' paradise in the desert protest against low pay and harsh conditions.
  
  This week has seen the latest in a series of strikes, with hundreds of labourers protesting in Sharjah. Indian, Afghan and Bangladeshi workers blocked a main road and began attacking police. After riot police were brought in from neighbouring cities, over 600 of the protesters were arrested.
  
  The strikes - which are illegal in the UAE - are occurring against the backdrop of an unprecedented economic boom in the Gulf states since the Gulf War, due in large part to rising oil prices.
  
  Jobs in Dubai are highly sought by workers from the Indian subcontinent, who are paid in the local currency, the dirham, which is pegged to the US dollar. As the dollar has depreciated in value, the real value of workers' salaries - which are regularly sent home to families in South Asia - has plummeted.
  
  Two weeks ago, Sharjah police arrested 1, 000 workers protesting low wages and their forced residence on their construction site in sub-standard housing.
  
  The recent disturbances have been by workers from Dubai based Tiger Contracting, founded by a member of the ruling family, and a leading player in the real estate investment boom in Dubai. The basic pay rate for Tiger construction workers is approximately 800 dirhams per month ($230) - equivalent to about $7.50 a day. Tiger Contracting recently announced the opening of its new multi-million dollar Marine Residences - the tallest building in the Dubai Marina development (pictured). Three-bedroom apartments in the complex start at £765, 000. The tower is dwarfed, however, by the Burj Dubai, which when finished will be the world's tallest building.
  
  Other strikes and recent labour disturbances in the area have included:
  
  • Around 200 workers of Bhatia Contracting held a sit-down protest in front of the Dubai Courts to demand a wage rise and to protest alleged unfair employment practices. The workers claim the company was deducting money from their wages as "water provision fee" and would not allow them holidays.
    
  • Police were called this week to control 400 workers from an Ajman engineering company in a dispute over wages. Eye-witnesses report rioters attacking company buildings and vehicles.
    
  • Around 1, 500 striking labourers were involved in a riot which rocked Sharjah last month, during which they set fire to management offices, real estate and vehicles.
    
  The enclosed video from Al-Jazeera highlights the experiences of low paid workers from the Indian subcontinent who are often charged up to two years' wages by local recruiters to find jobs in Dubai and other countries along the Gulf shores, where living conditions are poor and work-related accidents common.
  
  For some, the pressure of the work and conditions proves too much. The Indian embassy in Dubai reported that in 2006, 109 Indian labourers committed suicide in the UAE. Figures for suicides among other nationals are not currently available.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
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  atlanticwriter

• Why I've Avoided Bulgaria

  2008-03-20T18:08:00.000-07:00
  
  
  Three or four years ago, private investors began quietly buying up new build apartment developments in Bulgaria, developments which are now appearing on TV holiday programmes and for resale in the Sunday supplements.
  
  Tempting though some of these deals were on both Bulgaria's Black Sea coast and in its developing ski resorts inland, my personal feeling was that I wouldn't touch them. The reason? The "C" word - corruption.
  
  The announcement this week that the EU has withheld up to 100 Million Euros in farm subsidies from Bulgaria in the light of significant concerns about misappropriation of these funds is the latest in a series of corruption stories to emerge from the country in recent years. In January, the EU froze a separate 50 Million Euros following the alleged payment of bribes within the Road and Infrastructure Agency.
  
  Added to this corruption - which is described by EU officials as "high level" - is the fact that only one case of corruption and organised crime has been brought to court since 2000, a fact that has raised serious concerns about the integrity of Bulgaria's judiciary.
  
  The laxity of planning and building regulations within the country and the lack of accountability for property transactions have rendered Bulgaria a focus of various organized gangs wishing to launder money through the country's emerging property market. A persistent rumor, for instance, has been that dissident Irish Republicans have invested millions of stolen Euros in the Golden Sands development on the Black Sea coast.
  
  Putting all this together, Bulgaria has presented itself to me, frankly, as a dodgy place to do business as a property investor. If that's true, then I regard it as a place to be avoided.
  
  
  
  
  
  
  
  
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  atlanticwriter

• Buying Off Plan

  2008-02-25T04:33:00.000-08:00
  
  

  Buying off plan is potentially a great way to make significant and instant profits on property.
  

  The concept is quite simple: a developer wants to build an apartment block in town X to sell on for a profit. The plans have been completed, the building contractors are in place and he has been granted planning permission by the local council for the development. In order to finance this project, the developer has to go to the bank and present a business plan. The bank tells him that in order to release its money, he has to come up with proof of the scheme's commercial viability. The best way to do this is for the developer to sell some of the apartments in advance of them being built, thus securing some hard cash and also encouraging the bank to continue financing the on-going project.

  The question is, of course, what would prompt anyone to buy such an apartment before it has been built? The answer is not too difficult to guess – a sizable discount in the asking price. Because of the inconvenience of having to wait for the property to be built, the private (or corporate) investor will be offered the apartment(s) at a discount price on their current market value. The discount will be in the region of 10-20% compared with what an identical apartment would cost in the same part of town. This discount is, of course, the private investor's opportunity to make an instant profit.

  Here’s a scenario: if a new apartment in town X is worth £150, 000 on the open market, an off-plan purchase of an identical apartment which has not yet been built may be offered for sale at 20% less – say £120, 000. If you buy such an apartment, you have already made a saving (in other words, a profit) of £30, 000.

  It gets better. In an era of rising property prices, the investor who buys the apartment off-plan will hope that by the time the flat is finished, property prices have gone up. If this happens, he can sell his apartment as soon as it is completed and make more than the original £30, 000 profit. He will also make the difference between the original market value of the flat and its actual market value when it is finished. If the time span between securing the property off-plan from the builder and being able to sell it as a completed property is, say, two years, than the investor has two years' of price rises to profit from in addition to the original discount.

  The final fact that makes this an attractive option is that in order to secure the property off-plan, you don’t have to pay the balance until completion. You will exchange contracts on it while it is still under construction, requiring a 10% deposit in most cases, but the balance is not due until the building is finished.

  Take the imaginary flat in town X as an example. If property prices rise by 10% in the two years between securing the apartment and selling it when complete, the new apartment would now be worth not £150, 000 but £165, 000. Since you agreed to buy it for £120, 000, you can now sell it for a gross profit of £45, 000. Nice work if you can get it.

  The next post will look at the key issues to consider when buying off plan. What do I need to be aware of, how can I minimize any risks and how can I calculate whether the investment will be truly profitable?

  
  
  
  
  
  
  
  
  
  
  
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  atlanticwriter

• British House Prices Head up Again

  2008-02-18T13:14:00.000-08:00
  News of an impending house price crash have been greatly exaggerated.
  
  Rightmove, the UK's largest residential property portal, has announced today that the asking price for homes new to the market in February 2008 was on average £7, 500 higher than the prices being asked by sellers in January of this year.
  
  This means that the average price of a house listed on the market in February was £237, 856, up 3.2% on the previous month and up 5.8% on the previous year.
  
  Although the asking price is not always the same as the final sale price - you can get that information for any postcode area in the UK from Our Property - the rise this month does indicate a growing confidence that sale prices are on their way back up in the second half of 2008 and beyond.
  
  Three factors are likely to be contributing to this upturn.
  
  1. February is almost always a good month as far as asking prices are concerned. The New Year means that sellers often have fewer time pressures to sell by a certain date and so tend to be a bit more adventurous in their asking prices, knowing that they can drop them in the summer if they prove to be unrealistic.
  2. The recent interest rate cut and the corresponding cut in mortgage rates has been a signal that more buyers may soon be taking the plunge into the property market.
  3. The number of properties on the market is quite low - with February seeing the lowest number of new listings for three years. Those who do decide to sell, therefore, have the prospect of less competition than they may otherwise have had.
  The news is evidence of the underlying stability of the British residential property market from an investment point of view.
  
  
  
  
  
  
  
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  atlanticwriter

• How to Start Your Buy to Let Portfolio

  2008-02-08T23:32:00.000-08:00

  
  

  We've seen that buy to let is still a viable way of investing in property. That being the case, how do we choose the right property and area in order to make a profit in the medium term and cover our outgoings in the short term?

  There are a lot of different types of buy to let property - flats, terraced houses, holiday properties, etc. - but before thinking about which one to go for, it's important to think about where to invest.

  It's stating the obvious, I know, but, start by choosing an area with a high demand for rental property. An example might include a town or city that is attracting a lot of business relocations. When I first moved to Bristol, for instance, the city was buzzing with several major relocations: TSB, the Ministry of Defense, AXA-Sun Life and Orange had all set up national or international headquarters in the city in the previous few years, producing a housing need for tens of thousands of workers and their families. Needless to say, this contributed towards a property boom in both the rented and private sector.
  
  The regional press, the broadsheet papers (free to read online) or the business section of BBC online are good initial sources of information about such business developments. Keep your ear to the ground.
  
  Other factors might be equally important. A new university may be opening in town, or the area might be attracting significant numbers of migrant workers. In 2006, for instance, Suffolk announced that the number of its schoolchildren who spoke English as a second language had risen by 45% - a figure that reflected a growing influx of Polish and Estonian families into the county.
  
  A regional hospital can often be an untapped source of potential renters. There are tens of thousands of mobile NHS staff – particularly nurses – who are looking for low maintenance affordable housing close to their place of work.
  

  If possible, try and buy before a local boom. Spotting property hot spots after they have appeared on day time television programs is a British past time. The key, however, is to spot them before the boom has become common knowledge. To do this, you need information and a bit of intuition. Who would have thought that the economically depressed valleys north of Cardiff would be at the centre of a property boom in the first years of the 21st century? As the Welsh capital saw a huge increase in prices in the 90's, the knock-on effect was to force workers (especially young couples) to look further out of town. With quick road connections, ex-mining towns in the Rhonda saw house prices rise by up to 50% in one year alone.

  In a future post we will look at the kinds of properties that can work as successful buy to let investments. Before that, however, make sure you are targeting the right area.
  
  
  
  
  
  
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  atlanticwriter

• What did it Actually Sell for?

  2008-02-03T04:48:00.000-08:00
  
  
  When considering whether to buy or sell, private investors need hard information about the current market conditions.
  
  Our Property is a site I refer to often for giving me just that.
  
  Drawing on accurate information form the Land Registry, the site allows users to search for the actual sale price on completion of any property anywhere in the UK and to search for properties by postcode, road name or city.
  
  This is important information when comparing the sale price with the asking price in the estate agent's window and will help you plan your investment with greater confidence and accuracy.
  
  
  
  
  
  
  
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  atlanticwriter

• Resources

  2008-01-31T00:26:00.000-08:00
  
  
  
  
  
  
  
  
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  atlanticwriter

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