Investment funds that buy and hold bricks and mortar are being tipped as a good home for some investors funds. Many now believe that the rock bottom prices have all but vanished as commercial property in the UK starts to climb from its recent lows. Some reports suggest that the value of some commercial property has nearly halved from its peak in 2007.
This is one of the main reasons that UK commercial property has attracted the attention of many professional investors. With capital values at historic lows and the UK economy showing the first green shoots of recovery there will be good opportunities for landlords to increase rents in the next 3-5 years. So with the potential for both capital growth and a healthy increase in rental yields on the horizon, many think that the time is right.
Some local landlords and property owners have reported a surge in demand with areas like Stoke town centre recently having new leases agreed. Stoke-on-Trent now believed to be an up and coming property hotspot has benefitted from the recent completion of works to the A500 and a large input of regeneration funding.
Commercial property funds set to catch commercial property shares?
October 14, 2009
Repossessions selling quickly in the Midlands
October 13, 2009
There has been lots of talk in recent times about property repossessions; the UK government have put banks under pressure to use the repossession as a last resort. The government has even developed its own scheme to try and assist those whose homes are under danger of repossession.
This has means that at the other end of the repossession system less have hit the market, with the number of repossessions limited and house prices rising they are selling quickly. Repossessions, traditionally the first port of call for investors and novice developers now in shorter supply, local agents are reporting faster sales.
One estate agent from Nottingham commented ?my diary is stacked out on Saturdays with people looking for repossessions?.
UK housing stock still worth more than ?5 Trillion in 2009
October 12, 2009
The total value of the UK housing stock remains well above ?5 Trillion as we come towards the end of 2009. Many commentators staked their reputation on a large decrease in the value of the UK?s housing stock when the shortage of RMBS?s threatened the supply of mortgages. The ?RMBS?s? that?s Residential Mortgage-backed Securities are vital to the liquidity of the mortgage markets and when the ?lending taps turned off?, many concluded that the future was grim for the UK House price. No one can predict the future, but if previous periods of economic adjustment are any indicator of future events, it would be surprising if UK house prices were to fall during an economic recovery. So perhaps the worst is over, it will take a very brave person to call the bottom. It is interesting that many of the larger commercial property companies are starting to flex their muscles and reach into their war chests. These companies make their largest gains by reading the market correctly, do they know more than they are letting on ?
UK bank interest rates to remain frozen in time for half a decade?
October 11, 2009
There are no doubts in most people?s minds that the next UK government will be forced into some quite drastic spending cuts. If this theory is correct the thought of a large cut in spending coupled with increasing interest rates could really restrain the current delicate recovery.
Sources say that the UK Bank of England could be forced to keep interest rates at below 2% for the medium term of 5 years or more. Some experts also believe it could be 12months before we see a rise in the Bank of England base rate from its currently low level of 0.5%, with the immediate possibility of more money being pumped into the UK banking system to aid growth.
If this were to be correct it would inevitably lead to the revaluation of some assets many property and equities, after time this alone could assist the return to glory. This would be great news for both the UK residential property prices and the commercial property sector, the pay off could be a negative effect on the value of sterling.
House prices rise, simply supply and demand?
October 10, 2009
How many times have we heard the statistics relating to the current low levels of house building in the UK?
Well some sources suggest that we would need to build a city the size of Nottingham to cancel out the short fall in the number of homes needed to meet the demand for new UK households.
Most of you may be saying ?wow that?s quite a lot?, some may point to the assumption that demand may fall during a period of economic correction like we are currently experiencing. The point is we would actually need to build a city the size of Nottingham JUST TO MAKE UP THE SHORT FALL FOR 2009!
Reports have even made suggestions that by this time next year the shortfall in the number of dwellings needed in the UK could top the one million mark. Studies have made claims Britain is building new homes at the lowest levels for over 80years.
Housing Charities have been lobbying for renewed action to help the hundreds of thousands of people who they claim are living in over crowed conditions because we are simply not building greater levels of homes in the UK.
UK home owners pleased with the Bank of England?s interest rate decision.
Many home owners breathed another sigh of relief when again the Bank of England chose to keep the UK interest rates on hold at 0.5%.
They also issued a statement to confirm their continued programme of quanitive easing, saying that they will continue with their plan to pump a further ?175bn into the UK economy. They expect that this will be completed in the near future and the effects of these robust measures should filter through the economy in the early part of 2010.
This will of course only have a positive impact on the continuing rise in UK house prices; the burning question is what the Bank of England?s decision on interest rates will be next month. This will have quite a dramatic effect on the UK economy and house price inflation. So next month?s Bank of England interest decision will be watched more closely by both professional economists and the UK public in general.
Garage conversions for home owners who need for more space.
Many home owners find they need more space as their family expands, or they decide as many now do to work from home.
The growth of the home office and home working has increased at a great pace following the increase in on-line networking and collaboration projects. So if you do not fancy working in the spare bedroom or garden shed, a garage conversion offers a great building solution. There are many advantages to garage conversions, the greatest is probably the fantastic value they offer, starting at around ?6,000 for a very simple conversion they are probably the most cost effective way to ?add a room?, to most homes.
They are also usually by the nature of their construction more acoustically separated than say a spare bedroom, again this helps with the needs of the home office worker, who may not want the customer on the phone to hear ?Bob the Builder?, music in the back ground.
There are many uses for garage conversions from dining rooms, extra bedrooms, or even home gyms or home entertainment rooms.
Lenders prefer short term development finance to lending on investment property
October 9, 2009
A local specialist commercial property financer has divulged that many of the lenders they broker deals for are currently favouring lending for short term property refurbishment projects, rather than lending to investors who plan to hold property in the medium term.
This ties in with a report recently published in the financial press that quotes some economic consultants as predicting falls in UK property prices over the next 12 months. It could be that recent improvements in average UK house prices has given some nervous vendors the confidence to market their properties, this has in turn increased supply. Given that supply has increased the simple economics of supply and demand will of course place a downwards pressure on British house prices.
House prices rise to eliminate last 12months falls
October 7, 2009
The recent rise in house prices has now cancelled out the falls up to February leaving prices flat for the last 12months.
With the current trends this should mean that house prices in the next month will be higher than they were a year ago. This will be a pleasant relief from the negative news of recent times. The property price peak was hit back in October of 2007, before the sudden shortage of availability of mortgage funding caused the cycle of house price growth to come to a sudden end.
So now the UK public feels more optimistic about the prospects for recovery in UK house prices, I have no doubt they will be much happier to get on with the business of buying and selling houses.
Property investors have to work harder to find bargains
October 4, 2009
?Buy on the way down, and sell on the way up?, is the mantra of many experience property investors, and some now fear that the best bargains may have already been had.
It may seem foolish to ?buy on the way down?, but this depends on the discounts available, and in a falling market it is always easier to obtain larger discounts, as vendors fear their asset could be losing money by the day.
With some of the most reliable property price indexes now showing the fifth consecutive monthly rise in UK property prices, it is becoming much more of a challenge for property investors to negotiate purchase discounts, and with some vendors in a lot less of a rush to except offers.
With the introduction of new laws and regulations in the sale and rent back sector, this door has now closed to property investors who used sale and rent back schemes as a tool to expand their portfolios. Some consider that the bravest investors may have acted as trail blazers opening up the path for many other property investors and buy to let landlords to expand their property portfolios in 2010.
