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.
Commercial property transaction volumes drop by over 6% from 2010 to 2011
January 25, 2012
The values of commercial property transactions have dropped from just short of 36 billion to just less than 33 and a half billion. In 2011 there were just over 1700 sold mainly by banks or the customers of banks under pressure to stay within their facility agreements. University research estimates that a quarter of all commercial property has 100% outstanding property loans. They estimate that a further 35% are at 70% or more, this mean that 60% of all commercial property will not be re-financeable at the end of their facility terms. This has the knock on effect that banks cannot clear property backed loans off their balance sheets. So they have little or no appetite for speculative property development and new commercial property loans.
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.
Investment bankers look to lend to investment property mortgage specialists
November 20, 2011
The third quarter of 2011 has seen an increase in the number of loans to landlords by 16 percent. Interestingly this quarter has also seen investment banks looking to lend to the mortgage lenders who specialise in the buy to let market. The investment funds passed to these mortgage lenders has increased by 19 percent. This gives a clear indication that organisations and individuals that are best placed to predict the future of the buy to let property market are rapidly gaining confidence in the market. The 3.2 billion pounds that has been lent into the buy to let residential housing market is the highest level of investment funding hitting the market since the previous boom.
Government caps on housing benefit moves landlords to working tenants
November 4, 2011
Many landlords are changing their letting policies and are no longer prepared to opt for housing benefit claimants as the government has capped payments. A survey has shown that over three quarters of landlords who currently let to housing benefit claimants are taking steps to avoid these tenants in the future. This is a worrying statistic as over 1.3 million households receive housing benefit payments which are sent direct to their landlords. This comes at a time when more and more households are receiving housing benefit.
West midlands one of the high performing areas for buys to let
November 2, 2011
Areas around the west midlands are outperforming the London buy to let market and returning better yields. The report also showed that student buy to lets continue to return the highest yields at around the 7.6% mark. With HMO’s houses in multiple occupation running a close second at 7.5%. The data released from paragon the buy to let specialist show increasing yields on buy to let properties. This in turn will attract landlords who have been reluctant to expand their buy to let portfolios in recent years.
Tenants set to spend a third of take home pay on their rent by 2020
October 30, 2011
The average tenant in the UK is currently spending nearly 22 percent of their take home pay on their rent but this figure looks to rise dramatically over the next few years. With flat share rents in London increasing at around an annual inflation rate of 5 percent the London market is of particular concern. Rental inflation simply reflects the increasing demand in the rental market against a limited supply of suitable private rented housing stock. The average first time buyer simply cannot afford the deposit require to get onto the housing market so they are trapped with ever increasing rents. While only the core of professional landlords expand their property portfolios as many amateur landlords fear the future of UK house prices.
