New data released from the Lloyds Banking group shows continuing increases in monthly rents with the average rent rising from £682 to £716 in the last year alone. The rental market in London is also showing no signs of slowing with the average monthly rent in London at an eye watering £1212. This shows London average rents rising at well over five percent per year. Many cite the high costs of home purchase and the large deposits required to buy forcing many to stay in rented property. With the end of the stamp duty holiday it looks like the upward pressure on rents will continue.
Solid results delivered by UK Commercial Property Trust
March 20, 2012
The Guernsey based commercial property giant has delivered impressive £53million pounds of profit for the 2011 period. They produced these figures party because of good acquisitions and an enviable void rate of 3.4 percent down from 3.6 percent in the previous year. They achieved this while only booking £5 million pound portfolio uplift. Their portfolio is valued at £1.052 billion increasing 9 percent on the previous year’s holdings, with a net asset per share value hovering over 77 pence per share. They are well liked in the industry because of their low borrowings and a strong war chest of a cash facility. The company has performed well in the various key performance indicators of this type of Property Company. With good acquisitions, a high rental collection, low voids and an impressive tenant base.
Property sector committed to green goals despite economic down turn
March 6, 2012
The government is gearing up to make residential and commercial property that fails to meet rating F and G for energy efficiency unlettable. It is estimated just in the commercial property sector this will include 18 percent of the current commercial property stock. The government are looking at penalising the worst offending properties but are not looking to reward landlords that make the effort to hit the highest standards. Ultimately the next band up band E rated properties will be looking over their shoulders as ultimately if will probably be those that are next to suffer penalties. Those in the property industry are looking for clear direction and a road map to sustainability. With this in mind experienced property investors will be looking to buy newer of more efficient properties to protect their portfolios letability.
Buy to let back as landlords expand their residential property holdings by 20%
February 10, 2012
The last year has seen the number of buy to let properties expand by an impressive 20%. Banks are keen to point out that they are not favouring buy to let landlords over first time buyers. If you ask yourself how you would behave if you had to reduce the banks risk would you lend to highly geared first time buyers with a limited track record? Or would you favour experienced landlords who probably have other assets in the back ground? Many landlords are the cash rich in their 40’s and 50’s who are just buying one or two properties to help supplement their depleted pension pots.
Another slow day on the high street?
February 8, 2012
Well it’s not surprising with 1 in 7 UK high street shops stood empty, the bad news for retailers is experts in the sector are predicting further closures as more consumers switch to online retailers. Last year the number of empty shops started to flatten out with just less than 15% or around 50,000 vacant commercial retail properties. This was not helped by a large number of high profile retailers going into administration. Yet again it is the high streets in the south that are bucking the trend strengthening the north south divide. Some of the secondary retail areas seem to be locked in a slow cycle of decline with the least attractive high streets with the lowest foot falls perhaps consigned to history. It is simple supply and demand with online sales doubling over the last decade. There is simply not the demand for retail premises that there has been historically. So what will happen to these empty properties? Some will be demolished and but others may be converted to other use classes, some lend themselves to services offices and others residential use. Clever property owners will look at their portfolio of commercial investment properties and look at conversion of the upper parts to maximise their rental income.
Buy to let booming as banks back landlords again
February 3, 2012
Although young home owners are struggling to obtain suitable mortgage finance experienced buy to let landlords are enjoying an ever increasing pool of mortgage capital. It’s all about the banks mitigating risk, why lend to young first time buyers with a limited track record when you could lend at a lower gearing to experienced investors with a proven track record and other security in the back ground? There is said to be a hundred more deals on offer than there was a year ago and the increased competition is leading to better deals. In the last year the average buy to let rate has dropped from 5% to less that 4.8% which on typical buy to let margins has a great affect on landlord’s bottom line. This is like a self fulfilling prophecy as first time buyers struggle to get mortgage funding they are forced to rent and that’s another tenant for the buy to let landlords.
Commercial landlord’s dismay at governments “U” turn on pre-packs
February 2, 2012
Many commercial landlords feel that pre-packs are often used as nothing more than an accounting procedure to avoid paying thousands of pounds on lease agreements. The original plan was to give creditors three days to review information from the insolvency practitioners prior to the pre-pack going ahead. Many in the commercial property world had expressed concerns that three days was insufficient and a longer period was required. This proposal for a notification to creditors prior to the pre-pack has now been completely abandoned. It is the “Phoenix pre-packs”, that are seen by many in the property industry to be the sharpest practice, when a company is cut up and the most profitable sections purchased out of administration by a pre-connected party.
Commercial property set to recover in second half of 2012
January 27, 2012
Commercial property forecasters are predicting a revival in the commercial property sector later this year. They cite the Eurozone crisis as a delay to many companies expansion plans particularly in the London commercial property market. Many boards and directors are positive about signing new leases but are holding off. These decisions cannot be delayed indefinitely and analysts believe that many have held off expansion plans for as long as possible. Companies that are performing well are looking to be well placed for the recovery and will want properties in place to support their business plans. Some London post codes are seeing annual returns for commercial property of over eleven percent.
Buy to let mortgages just got easier
January 23, 2012
Increased competition in the buy to let mortgage arena shows with looser lending criteria. The Yorkshire building society has expanded its range of mortgage products to include properties with a value of less than a £100,000 and for applicants with incomes of £20,000 rather than the £35,000 previous figure. Although house prices have stagnated the growth in rent inflation has encouraged both landlords and banks to place their funds back into the property sector. The Co-operative bank has also pledged to increase funds to the buy to let mortgage sector by another third. All this has lead to triple the number of buy to let mortgage products available to landlords.
