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.
Cash rich to make a killing on brownfield sites?
October 25, 2011
The capital values of many residential development sites has plummeted over the last few years as the banks appetite for lending on residential land and land banks has reduced. The prime residential sites are still selling well and for good prices where the demand and competition is high. The latest quarter’s figures show the first falls in residential land values since 2009. The impact has yet to be felt of the governments offer to carry out joint ventures on development land where they defer payment for the land until the final properties are sold. The supply of sites has risen sharply as many site owners have put off sales hoping the market will improve. Many are now looking to minimise their exposure to residential land prices and improve their liquidity by realising the capital tied up in their sites. Sites going to market are up 9percent where demand has only risen by 3percent. Many sites simply no longer stack up or are viable as their GDV (gross development values) have fallen in line with falls in UK house prices. The only positive is that predictions show that land values will remain stable for the next 12months. So many site owners are looking to construction companies for joint venture proposals.
British Property Federation backs brownfield development through new planning policy
October 13, 2011
The House of Commons has listened to guidance from the British Property Federation on planning policy. The new planning policy framework needs to focus on the development of brown field sites to satisfy organisations like the National Trust and other anti green field development groups. Developers at present carried out new builds on brown field sites as they can currently find good value brown field development sites. The new planning policies are designed to speed up the majority of developments that are welcomed by local residents.
Return of the enterprise zones set to concentrate property investment
August 16, 2011
The enterprise zones are designated geographical areas that are designed to stimulate economic growth. This is encouraged by a number of government back stimulus in the form of zero business rates for up to five years and simplified planning rules. These measured are often designed to make border line speculative property development deals tip the scales and go live. Banks look at lending on these property development sites more favourably as they have a more saleable asset to leverage.
Property valuations rise by over a third in July as purchasers and Investors take advantage of improved mortgage market.
August 13, 2011
Valuations of residential properties have increased by an impressive 32 percent on last July’s figures with many agents reporting their strongest July in a four year period. Many in the property industry attribute this to a boarder range of mortgage products giving home owners more scope to move. Lenders have made the traditional rush to hit half year lending targets which has lead to another group of lenders entering the increasingly competitive buy to let market. One in nine property valuations is now for property investors, this is an amazing figure given the percentage of residential properties that are suitable as buy to let stock. Landlords are rapidly expanding their property portfolios as rents hit record highs and investment returns increase. If you look at a very average terrace property in a good area say at around the 90k figure and it costs with deposit and fees 25K of capital. That will give you around 11 percent return on your cash investment dependent on deal structure. You can see why buy to let is no longer the dirty phase it has been in the last few years.
UK property investment driven by weakness in the pound?
July 9, 2011
Foreign property investors and property developers are increasingly choosing the UK for the home for their investment funds. This is the case with both private investors and institutional investors. One of the favourite destinations for these funds is prime London commercial property. The Chinese have been piling funds into the UK to take advantage of the currency differences. Interestingly Australian investors have also been looking at UK property to offer them good value and high returns. This is again driven by changes in currency strength. One investor sighted an example that for every £10,000 he had moved back to Australia around 10years ago he was now being able to buy back in at £19,000. With these types of returns the UK looks set to be a good home for foreign investment.
Asks the experts free building and property advice
June 25, 2011
Do you have a building or property related question and you are not sure where to get the answer? Having a long track record of success in the building industry in the midlands for many years we have built up an enviable network of trusted and seasoned professionals that can assist in all building and property issues. We want to hear from YOU!
Please leave a comment and let us put it to our panel of experts and we will be able to give you some free advice that could save you thousands of pounds. We have access to some of Derbyshire’s finest, commercial surveyors, property lawyers, mortgage brokers, structural engineers, quantity surveyors and architects.
Property investor’s appetite for commercial property ripples into the north
June 7, 2011
Commercial property investors are following the usual pattern of the ripple effect, as prime London commercial property yields are affected by increases in capital values. They are looking for the next hot spots and as the investors move their attention and funds to other areas, sectors and properties, so do property speculators. Data has shown an incredible increase in completed deals in Manchester office space with deals completed hitting two hundred percent. There are big similarities between the current commercial property market in Manchester and that of the London market as the recovery began. So where next for increases in lease uptake and capital values? Many believe there is good value in places like Birmingham, Nottingham, and Stoke on Trent, time will tell.
Investors return to property as commodity markets gain uncertainty
May 27, 2011
Many investors are returning to investment property as there are increasing concerns that the commodity markets are becoming overvalued. This view has been strengthened further by research from the Worldwide Property Group their research showed that many investors look to property in uncertain markets. This coupled with fabulous results from the Paragon group which specialises in buy to let finance shows that property investment is fast becoming the home of the clever money.
Funding gap narrows but challenges remain for commercial property funding
May 24, 2011
21 billion pounds of UK commercial property debts have been paid back to lenders during 2010, this has been assisted by some loans being diverted into the Irish’s National Asset Management Agency. The agency has taken on about 10million of this debt. The main issue facing many landlords is that they will be looking to refinance debts over the next five years. As they look to renegotiate there loan notes the banks are looking to do the exact opposite and repair their balance sheets. UK lenders and building societies held almost two thirds of the commercial property debt. With the other third being held by other lenders and foreign lenders.
