Building Solutions (Midlands) Blog » Commercial

Good news for commercial landlords as High Court rules that some company voluntary arrangements are unfair.

Richard — Fri, 23 Jul 2010 18:37:24 +0000

A recent high profile court case has given many commercial property owners and managers a feeling that justice has been done. Landlords have long complained that company voluntary arrangements and pre-pack agreements are becoming a refinancing tool rather than a last resort. Retailers in particular have been accused by some in the property sector of using this type of legislation to circum vent lease agreements and pass some of their problems on to landlords. Some administrators have been accused of losing their sense of fail play over the use of company voluntary agreements and pre-pack companies. This recent court ruling will at least set some clearer frame work for retailers and landlords who find themselves in these unfortunate circumstances.

Investors wary as public sector starts to hold back on construction projects?

Richard — Wed, 07 Jul 2010 09:13:47 +0000

Investors are becoming increasingly wary of buying shares in construction companies as fears continue that last week’s budget will have negative impact construction companies’ profits. Those who specialise in local authority contracts have been hit hard and their share prices have suffered. Social housing projects have been one of the areas that have been identified as a potential casualty of the budget cuts.
There is no doubt that news like this adds further pressure to a business sector that is already suffering from some of the toughest times for decades. With a number of local construction companies closing their doors, it is clear evidence that only the toughest will survive.

How do you get planning permission for new homes while planning is in Limbo?

Richard — Mon, 05 Jul 2010 07:32:55 +0000

Many in the world of planning and development are slightly concerned at what they see as a lack of clear direction as the planning laws are altered after the scrapping of regional plans. This has caused some councils to hold back decisions on landmark planning decisions until new policy is clear.
Some developers are left holding expensive sites and land for both residential and commercials property development. The lack of suitable consented sites and land will have an impact on the housing market recovery and may lead to land with consent changing hands at an artificial premium.

Landlords require more powers of influence over Insolvency practitioner’s charges?

Richard — Fri, 02 Jul 2010 10:01:35 +0000

There has been much debate in recent times that is tougher times. That the number of insolvencies has increased. Landlords have been concerned that insolvency practitioner’s fees may be high in comparison with similar fees required by secured lenders in the recovery of assets. Landlords who are often unsecured creditors are at a disadvantage in comparison with Banks who have a direct charge on a director’s home or other assets. So it may be that further regulation will appear in these more challenging financial times to assist landlords in debt recovery.

Making higher profits from buy to let?

Richard — Tue, 29 Jun 2010 09:47:25 +0000

Landlords and property investors are set to make higher profit margins as rents are rising and a shortage of suitable rental properties are coming to market.
The current increases in rents achieved are in complete contrast to the final quarter of last year as rents showed no increase back in 2009. Results from the Royal Institute of Charted Surveyors show their surveyors as optimistic about the future for rents. They reported the highest level of optimism for rising rents since the start of the survey in 1998. The increase in rents is driven by a direct decline in the number of properties available to let. With sound economic principles behind the increases in rental costs there appears little doubt that rents are and will continue to rise for the foreseeable future.
These statistics come at a time when many accidental landlords are choosing to leave the market as they have seen a recent rally in capital values. The demand for rental property also appears to be on the increase which coupled with less rental housing stock is a sure sign that rents will continue their upward course.
With the first signs of a freeze in the buy to let lending market starting to turn to a thaw and rents raising this is the best time for landlords for years! The banking and property finance market always follows a similar course. When things go bad the banks panic and stop lending, then they start to gradually lend to the “safest bets”, top earning domestic mortgages and low loan to value mortgages. With a marked increase in the number and type of buy to let mortgage products available, it bodes well for other sectors in the property sector. The next area that should receive positive news after the buy to let lending has recovered is the commercial property market. With time, better deals will make the commercial property market again a better proposition for property investors. Then that most interesting of all property sectors the world of speculative property development. This area of the property market has been brought to its knee’s by the worst lending drought for decades. This sector has been out of vogue with lenders and partly blamed for the financial crisis. It is true that speculative property development did play its part in the financial crisis. You only need to look at the volume of available property for sale in Spain. The whole country is crippled by a huge over supply of new build properties, with many experts in the European property market expecting fire sales and some real bargains as lending and reality bite.

Investors could be set to make cash quickly form distressed property sales

Richard — Tue, 08 Jun 2010 11:47:52 +0000

Top property professionals being surveyed who are expecting to see an increase in distressed property sales has increased. The number expecting to see more distressed property sales has increased form 14 percent to 42 percent.
Interestingly there are institutional investors looking to benefit from the large property loan books that are currently burdening many banks accounts. The increase in activity amongst investment funds that specialise in purchasing, re-financing and managing property investment portfolios has also increased as they look to take advantage of the increase in distressed property sales. There have been some positive news from the property market over the previous twelve months but recent government announcements have cause struggling property owners to give up while the going is still good. They are not prepared to risk a further drop in this ever popular asset class, so are they making the right decisions? What will happen to the property sector over the next twelve months? Leave your comments?

Private equity investors backing new residential development sites

Richard — Fri, 04 Jun 2010 16:29:06 +0000

Experienced members of senior management from national house builders are being poached and backed by private equity investors in new ventures into residential property development. One such company has received one hundred million pounds of private funding to focus on new build residential developments in and around the capital.
These new ventures are thought to be focusing on London and mainly the top end market, and they must be confident that prices in this sector will remain relatively stable. Those who follow the UK property market closely look at a few key performance indicators of the markets future. They often follow prices achieved at auction, actual trading of house price futures and the top end of the London market. What happens to the top end of the London property market can often ripple through the rest of the UK housing market.

How to beat the planners, and provide more private rented houses?

Richard — Thu, 03 Jun 2010 20:34:57 +0000

The new proposed planning system will cause delays, confusion and a shortage of property for the private rented sector. This is the thoughts of many in the opposing parties, but these criticisms are echoed by many planning consultants and surveyors in the property sector. They will be sad to see the regional spatial strategies scrapped.
So as the housing market is tip toeing through a fragile recovery is this really the best time to fiddle with the planning system? Ask small developers and house builders and they will say no, with property development finance thin on the ground. Developers are working really hard to balance risk and finance costs and the last thing that the property and construction industry needs is a “sudden shake up”, of planning law. We would love to hear your views and comments.

Creative funding solutions the answer for small house builders and property developers?

Richard — Sat, 29 May 2010 07:56:32 +0000

Joint ventures, private equity, venture capital and business angels look to fund small developments and enjoy high yield returns as the banks continue the funding drought for speculative property development.
Many of the small residential builders and house builders have simply shut up shop in recent times unable to finance sites as capital adequacy criteria has stayed stringent. The lending drought for this sector of property finance has been a big challenge for many developers. Many experts in development finance expect the lending drought for development finance to continue, and that this niche area of bank lending will be one of the last areas to be fully restored as the UK economy continues to recover. There are still lots of lenders offering property development finance but at a much lower level of leverage.
The lenders must keep within their level of capital adequacy for the higher risk lending to satisfy both bank regulations and the peace of mind of their shareholders.

More new build property developments

Richard — Thu, 06 May 2010 19:42:23 +0000

Property development is no longer the dirty word it has been since the beginning of the down turn, so what’s changed? Well a number of factors have caused the builders to start building again, for residential house building of new build developments a combination of pent up demand and a very slightly easing in bank finance for speculative residential development funding have been instrumental. The world of commercial property development has been bolstered by spending on several large projects and works for the 2012 Olympic Games.
This is great news for the construction industry but an early rally is not always a sign of a medium term recovery or normality in the property sector. We need to remember we have recently come from a very low base and we need to focus for a sustained recovery.